Townhouse for sale in the Upper East Side neighborhood of New York City.
Adam Jeffrey | CNBC
Some of the pressure is coming from housing prices, although they are still higher than they were a year ago.
Several new reports indicate that price gains are shrinking and that home sellers are beginning to give up after the spring market slump.
For the first time since the start of the COVID-19 pandemic, when home sales halted, the typical home sold for slightly less than the asking price — 0.3% less — during the four weeks ending June 23, according to the real estate report. Redfin Financial Brokerage. A year ago at that time, the typical home sold at list price. Two years ago, it was about 2% higher than the list price.
But this does not mean that the housing market is in a state of collapse. Just under two-thirds of homes are still selling for above their asking price last month; However, this is the lowest share since June 2020. While most sellers are still offering their homes at higher prices than similar homes sold a year ago, some admit they simply cannot afford those prices.
Mortgage rates remain stubbornly high, with the average 30-year fixed mortgage rate remaining just above 7% for the third straight month, according to Mortgage News Daily.
The widely watched S&P Case-Shiller index showed home prices in April were up 6.3% compared to April 2023. May prices continue that trend. Home prices are now 47% higher than they were in early 2020, and the median sales price is now five times the median household income.
CNBC has an exclusive preview of next week’s home price data from a different index, ICE Mortgage Technology. The data shows annual home price growth slowed to 4.6% in May from 5.3% in April. That’s the slowest rate of growth in seven months.
Supply has begun to increase, causing prices to slow. According to Realtor.com, total active listings are now 35% higher than they were this time last year. However, even after the recent growth, inventory is still more than 30% below typical pre-pandemic levels.
“Some buyers think they can get a deal because they hear the market is great, and some sellers think every home will sell for top dollar regardless of condition,” said Mary Kruithof, a Redfin agent in Los Angeles, in a statement. “In reality, it all depends on the home and the location.”
