Townhouse for sale in New York’s Upper East Side.
Adam Jeffery | CNBC
Some of that excitement is coming from home prices, although prices are still higher than they were a year ago.
Several new reports suggest price growth is shrinking and home sellers are starting to give up after a sluggish market in the spring.
For the first time since home sales halted at the start of the COVID-19 pandemic, the typical home sold for just below the asking price (0.3%) in the four weeks ended June 23, according to real estate brokerage Redfin. At this time a year ago, the typical home sold for the asking price; two years ago, it sold for about 2% above the asking price.
That doesn’t mean the housing market is collapsing: Just under two-thirds of homes sold for above their asking price last month, the lowest percentage since June 2020. Most sellers are asking for more than comparable homes sold a year ago, but some are acknowledging they simply can’t maintain those prices.
Mortgage rates remain elevated, with the average rate on a 30-year fixed mortgage hovering just above 7% for the third straight month, according to Mortgage News Daily.
According to the closely watched S&P Case-Shiller Index, home prices in April rose 6.3% from April 2023. Prices in May continued that trend: Home prices are now 47% higher than at the start of 2020, and the median sales price is five times the median household income.
CNBC got an exclusive early look at home price data due next week from a separate ICE Mortgage Technology index, which showed that annual home price growth slowed to 4.6% in May from 5.3% in April, the slowest rate in seven months.
Supply is starting to increase, which is helping to push prices down: The total number of homes for sale today is up 35% compared to the same time a year ago, according to Realtor.com. But to put this in perspective, even after the recent increase, inventory is still down more than 30% from typical pre-pandemic levels.
“Some buyers hear the market is cooling and think they’ll get a deal, while some sellers think any home will sell for top dollar regardless of its condition,” Marie Kluythoff, a Redfin real estate agent in Los Angeles, said in a press release. “In reality, it all depends on the home and its location.”
