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A turning point may be occurring in the housing market. Fewer people were searching for “homes for sale” on Google during the week ending May 21, down 10% from a year earlier. Home tour activity is falling slightly, mortgage purchase applications are down 14% compared to a year earlier, and, while it’s still uncommon, more home sellers are dropping their asking prices.
Meanwhile, housing inventories are showing a slight improvement. Active inventory rose 8% annually, the first time that benchmark has been reached in nearly three years, realtor.com®’s monthly housing trends report shows. A rising number of homeowners may be growing more confident in selling, and they may want to cash out before any slowdowns in the housing market.
Competition is still tight. Fifty-four percent of homes that went under contract had an accepted offer within the first two weeks of being listed, Redfin reports. Thirty-nine percent of homes went under contract within one week of hitting the market.
Home prices are still high. The median national home price climbed to an all-time high in May, reaching $447,000, realtor.com® reports.
Aspiring buyers are expressing greater concerns over prices. Fannie Mae’s home purchase sentiment index showed that 79% of respondents reported that it’s a bad time to buy a home, a new survey high. Affordability is the main reason for their concern, the survey found.
Mortgage rates and home prices have climbed, pushing on buyers’ budgets. “The sudden surge in mortgage rates led to a sudden and significant cool down in the housing market in May,” says Chen Zao, the lead of Redfin’s economics research team. “However, mortgage rates are now stabilizing and homes remain in short supply, so while we do expect home price growth rates to decline, we don’t expect prices to fall much at a national level. For home buyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up.”