Buyer’s Market Incoming? More Homes for Sale Gives Buyers Choices and Power
The housing market is becoming a bit more friendly to buyers as inventory continues to rise.
Even though existing home prices continued soaring to new heights, more properties went up for sale, according to a report from the National Association of Realtors (NAR).
That’s giving buyers the opportunity to shop around and even negotiate some of those high prices down. (Existing homes do not include new construction.)
The number of existing homes for sale in June was up 23.4% from the previous year, according to the report. This was the most unsold housing inventory since May 2020.
That’s changing the dynamic in the market and giving more power to buyers, according to NAR Chief Economist Lawrence Yun.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” Yun said in a statement. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers.”
Existing home sales dropped 5.4% year-over-year in June.
This is because record-high prices and mortgage rates that have stayed high for longer than many expected are combining to keep buyers on the sidelines.
The median sale price of an existing home hit an all-time high of $426,900 in June, up 4.1% year-over-year. This was the 12th month in a row of price increases.
Meanwhile, mortgage rates averaged 6.77% for 30-year, fixed-rate mortgages in the week ending July 18, according to Freddie Mac data.
Despite affordability challenges, first-time buyers are still finding ways to become homeowners. They purchased 29% of all existing homes in June, according to NAR.
“There is more inventory out there to choose from now,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. “But a big difference is that home prices in most markets are higher than they were a year ago and more prospective homebuyers are simply priced out.”
Where are existing home prices up the most?
Existing home prices surged the most in the Northeast, according to the NAR report. Prices were up 9.7% year-over-year to a median $521,500 in June.
Sales in the region were down 6% annually in June.
The Midwest experienced the second-largest price bump. Prices rose 5.5% annually to a median $327,100 in June. Sales slid 6.1% year-over-year.
In the West, prices rose 3.5% to a median $629,800 in June. Sales were the same as the previous year.
Prices ticked up 1.7% in the South to a median $373,000. However, sales fell 6.9% year-over-year.
“Even as the median home price reached a new record high, further large accelerations are unlikely,” Yun said.
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