Fast-rising home prices and interest rates coupled with a slipping economy helped to cool the nation’s housing market in June leading to a nearly 2% increase in the number of homes on the market. That marks the first month since July 2019 (pre-pandemic) that housing inventory increased year over year.
The home-inventory bump dovetails with other data indicating the nation’s housing market lost some steam this past month, according to a June housing-market report from Seattle-based Redfin. The median home-sale price nationwide did rise 11.2% in June, but that’s the smallest year-over-year increase in about two years, the report notes.
San Francisco actually posted a home-price decrease of 0.5%, turning in a $1,581,000 median sale price for June. (North Port, Florida, posted the highest growth in home prices, at 29.7% year over year as of June, to $480,000.)
Home sales for June declined by nearly 16% year over year in June, the Redfin report shows, “the largest decline since May 2020.”
“The country’s economic woes have already cooled the housing market, and they’re likely to continue dampening demand,” said Redfin Chief Economist Daryl Fairweather. “… I advise sellers to commit: If you decide to sell, do it quickly before demand potentially falls further.
“And price carefully. This is not the time to test the waters. You’ll do more harm than good if you overprice and have to do a price reduction or take the home off the market.”
The Redfin report notes that the market is now a mix of good and bad for homebuyers, who are seeing higher monthly payments than earlier this year due to the spike in interest rates — averaging 5.52% for a 30-year fixed mortgage in June, the report shows. At the same time, homebuyers are facing less competition as home inventory starts to bump up slightly.
The dip in competition often allows homebuyers to make less risky offers that avoid waiving protections like home inspections and appraisal contingencies.
Highlights from the June report include the following:
- Total homes sold for the month of June came in at 524,200, a 15.5% year-over-year decline.
- Pending home sales in June stood at 500,000, a 12.6% drop from a year earlier.
- New home listings also were down 4.4% year-over-year in June, at 636,500.
- Total homes for sale in June stood at 1,450,900, up 1.8% year over year.
- Median days on the market jumped from three to 18 year over year as of June while months of housing supply also was up over the period, from 0.5 to 1.7 months.
- The volume of homes sold above list price in June stood at 55.5%, down 0.9 percentage points from June 2021.