The Shifting Real Estate Market: A Slow but Steady Move Towards Buyers
The real estate market is showing signs of change, with potential home buyers getting a glimmer of hope amidst high prices. The National Association of REALTORS® (NAR) recently released their latest housing report, indicating a gradual shift from a seller’s market to a more balanced one.
Record-High Prices and Declining Sales
In June, existing-home sales, which include single-family homes, townhomes, condos, and co-ops, experienced a year-over-year decline of 5.4%. Despite this drop in sales, the median existing-home sales price surged by 4.1% to reach a record $426,900, marking the second consecutive month of record highs. However, NAR Chief Economist Lawrence Yun suggests that “further large accelerations are unlikely” as the market approaches a balance between supply and demand. He notes, “Supply and demand dynamics are nearing a balanced market condition. The month’s supply of inventory reached its highest level in more than four years” (NAR, 2024).
Increasing Inventory and Changing Buyer Behavior
The increase in housing inventory is a promising sign for buyers. June saw a 3.1% month-over-month growth in unsold existing homes, a 23% rise compared to the previous year. With more listings available, homes are spending more time on the market—22 days on average in June, up from 18 days a year prior. Yun observes, “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis” (NAR, 2024).
All-Cash Sales and First-Time Buyers
All-cash sales continue to be a significant part of the market, accounting for 28% of transactions in June. This trend is driven by buyers looking to avoid high mortgage rates, which are averaging near 7%. Individual investors and second-home buyers, who frequently make all-cash purchases, comprised 16% of home sales in June. Meanwhile, first-time home buyers are still managing to enter the market, making up 29% of sales in June, an increase from 27% a year earlier (NAR, 2024).
Regional Sales Trends
NAR’s report provides a regional breakdown of existing-home sales in June:
- Northeast: Sales fell 2.1% from May, with an annual rate of 470,000, marking a 6% decline from a year ago. The median price rose 9.7% to $521,500.
- Midwest: Sales dropped 8% from May, reaching an annual rate of 920,000, down 6.1% year-over-year. The median price increased by 5.5% to $327,100.
- South: Sales decreased nearly 6% from May to an annual rate of 1.76 million, down 6.9% from the previous year. The median price rose 1.7% to $373,000.
- West: Sales fell 2.6% to an annual rate of 740,000, similar to the previous year. The median price increased by 3.5% to $629,800 (NAR, 2024).
Conclusion
The real estate market is slowly transitioning towards a more balanced state, offering potential home buyers more options and slightly less competition. As inventory rises and prices stabilize, buyers may find better opportunities to secure their dream homes.
Source: National Association of REALTORS® (2024). “Market Is Shifting Slowly in Buyers’ Favor.”