📈 Market Highlight: The Great Wait-and-See

The U.S. housing market is cooling into balance as inventory rises, mortgage rates steady, and buyers take a cautious but deliberate approach. This week’s market update breaks down what agents need to know about shifting buyer behavior, price trends, and the return of negotiation power.

By Christian Hill 9 min read
📈 Market Highlight: The Great Wait-and-See

**Sources (with links) used for this article are compiled at the bottom. These sources would also be good for further reading/research into the topic.

Week of August 11: As we kick off August, the housing market is showing signs of settling into a more balanced groove. Residential agents across the country are seeing a shift... More homes are available for sale than we've seen in recent years, but buyers remain cautious. Let's dive into the key trends happening nationally with inventory, buyer and seller behavior, mortgage rates, and prices, and what they mean for you and your clients in this evolving "normal."

Inventory — More Homes for Sale (Finally!)

Good news on inventory... There are significantly more homes on the market now than a year ago, giving buyers more choices than they've had in a long time. National housing supply has been rising for months, up by double digits year-over-year. In fact, July marked the third straight month with over 1 million homes listed for sale nationwide, a new post-pandemic high. Many markets, especially in the South and West, have seen inventory jump 20-30% or more compared to last summer.

What’s causing the inventory boost? A few factors are at play. Some homeowners who locked in ultra-low mortgage rates in 2020–2021 are finally deciding to sell despite higher rates, adding fresh listings.

New home construction has also helped... Builders have been busy, and newly built homes (often with incentives like rate buydowns) are adding to the options. Perhaps most importantly, homes are simply sitting on the market longer now instead of disappearing in a weekend.

The typical home is taking about a week longer to sell than it did a year ago. This means listings are accumulating, and buyers aren’t feeling the same rush or panic to snap up a house immediately.

As a result, months’ supply of homes for sale has grown to around 4½ to 5 months. For context, during the market of 2021, we had under 2 months of supply nationally. Now we’re approaching the level where neither side has a huge advantage.

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Buyer Behavior — Cautious But Interested

Even with more inventory on the shelves, buyers aren’t exactly storming the gates just yet. Many house hunters remain price-sensitive and cautious. The number of homes under contract (pending sales) is actually a bit lower than it was this time last year. In June, contract signings were down a few percent year-over-year, and July’s early data shows a similar softening. High home prices and elevated mortgage rates have kept some would-be buyers on the sidelines, still waiting for that affordability break.

But don’t mistake caution for lack of interest. There are signs of pent-up demand simmering. Mortgage applications for home purchases have been running above last year’s pace (a signal that buyers are preparing to act). Anecdotally, agents are reporting more foot traffic at open houses, and online searches for homes are up.

People want to buy; they’re just taking their time to make sure they can comfortably afford it. Today’s buyers feel they have time to shop around. They know there are more choices and that homes aren’t vanishing overnight.

In this environment, many buyers are being selective... They’ll pounce on a move-in-ready home that’s priced right, but they won’t rush into a bidding war or overpay out of fear of missing out. In fact, some are writing offers below asking price or asking for seller concessions, and often they’re successful. The bottom line is that buyers have a bit more breathing room now, but they’re still very mindful of budgets and mortgage costs.

Seller Activity — New Normal

Sellers are indeed coming to market. New listings in mid-summer were slightly above last year’s very low levels, but many are learning they can’t set any price they want and expect a quick sale. With buyers gaining negotiating power, sellers are adjusting their expectations.

One big shift is in pricing strategy. We’re seeing fewer aspirational high prices and more realistic listing prices. The gap between what sellers ask and what buyers ultimately pay is narrowing. In fact, national data shows the median asking price is barely up from a year ago (only about 2% higher, which is the smallest annual increase in nearly two years).

Price growth has essentially stalled, and in some markets, list prices are declining. Roughly one in five listings now includes a price reduction before finding a buyer, a sign that overpriced homes won’t get much love.

Sellers are also more open to incentives and concessions (covering closing costs, offering repair credits or mortgage rate buydowns, etc.), especially if their home has been on the market for a while.

The good news for sellers is that most homeowners still have a lot of equity to play with thanks to the past decade of rising values. Home prices nationally are near record highs, so sellers who have owned their home for a few years can still walk away with a healthy profit.

But to get to that closing table, they need to meet the market halfway by pricing competitively and being patient. In a balanced market, the well-prepared and well-priced homes will sell, while those clinging to last year’s sky-high price expectations might lag.

Mortgage Rates — High but Steady

If there’s one thing keeping both buyers and sellers a bit hesitant, it’s mortgage rates. Rates are substantially higher than they were in the pre-pandemic years, and that has been the chief affordability hurdle. The 30-year fixed mortgage has been averaging in the mid-6% range throughout the summer. As of this week, the national average 30-year rate is around 6.7%, which is almost exactly where it stood a year ago at this time.

In other words, rates haven’t fallen much over the past year, but the silver lining is that they’ve stopped shooting up and have been holding relatively steady for several weeks. In fact, we’ve been in a narrow band near the high-6s for about a month now.

For homebuyers, this stability offers a bit of predictability (no sudden spikes to throw off budgets). “Stable” doesn’t mean “low,” of course. These rates are still twice what they were in 2021, but at least buyers can plan knowing roughly what to expect for financing costs. Some buyers are taking advantage of this lull by locking in rates now, while others are using creative tactics like temporary buydowns or adjustable-rate mortgages to ease initial payments.

There’s also a psychological adjustment happening... After two and a half years of higher rates, the shock has worn off. Many buyers have accepted that a 6-7% mortgage might just be the new normal for now, and if the right home comes along, they’re willing to proceed and perhaps refinance later if rates dip.

Home Prices Leveling Out

National home prices are holding up, but the days of runaway price growth are behind us (at least for now). The median price of an existing home in June reached about $435,000, a record high for that month, yet that was only around 2% higher than a year earlier.

Similarly, list prices on Realtor.com in July were less than 1% higher year-over-year, essentially flat. In real terms (factoring in inflation and wage growth), houses are actually a touch more affordable than last year, because incomes have risen a bit faster than prices recently.

That said, affordability is still a major challenge. Prices haven’t fallen nationally because inventory, while improved, is not in excess. We still have fewer homes for sale than we did in the late 2010s. So prices are basically treading water... Not soaring, but not collapsing either. In some metro areas, especially those that saw huge spikes during the pandemic, prices have come down from their peak.

For example, parts of the Sun Belt and West Coast are seeing year-over-year price declines. In roughly a third of major markets, listing prices are down compared to last summer, and a number of cities have dipped below their 2022 price peaks.

On the flip side, other areas (particularly in the Northeast and Midwest) remain more resilient with modest price gains. Real estate is local, and we have a mixed map right now.

For homeowners, the big picture is that home equity is near all-time highs. The typical homeowner who’s been in their house at least a few years has gained significant equity. This provides a cushion and confidence. There’s no widespread distress among sellers. For buyers, the price plateau means you likely won’t be chasing prices higher each month.

We may even see a small national price dip by the end of the year (some forecasts predict a slight decline, on the order of 1%). But barring a major economic shift, a sharp crash seems unlikely because inventory, though better, is still not oversupplied.

Insights for Agents in a Balanced Market

With the market transitioning toward balance, agents have a prime opportunity to guide clients with a steady hand. Here are some tips and talking points to use when advising sellers and buyers in today’s environment.

Set Realistic Expectations for Sellers

Let your selling clients know that homes aren’t selling overnight in most cases. Encourage them to price their property competitively from the start. Use recent comparable sales (which may show only small price gains or even flat prices year-over-year) to back up your pricing recommendation.

Remind sellers that if a home lingers on the market, it’s okay. It’s normal now for it to take a month or two to find the right buyer. Patience and flexibility are key. If activity is slow, discuss strategies like minor price adjustments or offering incentives (covering closing costs, providing a home warranty, etc.) to attract buyers.

Empower Your Buyers

For your buyer clients, this is a refreshing change from the feeding frenzy of the past. Emphasize that they have more leverage now than at any time in recent years. They can take the time to see multiple homes and really find the right fit. In negotiations, they can be a bit bolder (asking for repairs, contingencies, and even price reductions or seller-paid rate buydowns), especially if a home has been on the market for a while.

Educate them on local inventory trends so they know which areas or price points have more supply (where they can negotiate harder) versus which segments are still competitive. Also, encourage buyers to get pre-approved and watch those mortgage rates. Rates are high, but relatively steady. If they find a home they love, they shouldn’t feel paralyzed waiting for rates to drop.

Marry the house, date the rate... They can always refinance in the future if rates improve. The important thing is that increased inventory has reduced some of the pressure, so they have room to make decisions rationally rather than emotionally.

Highlight the Balanced Market Benefits

A balanced market can actually be the best of both worlds... buyers aren’t overpaying or waiving every contingency, and sellers who price well can still achieve good value for their home. Remind clients that this kind of market leads to healthier transactions, typically with proper inspections, negotiations, and a bit of give-and-take from both sides.

It’s no longer “wild west” for one side or the other. As an agent, your expert guidance is important in this climate. You can help sellers position their home to stand out (now that buyers have options to compare), and help buyers craft smart offers that protect their interests without alienating the seller.

Above all, reassure your clients that the housing landscape today is not 2008. We’re seeing a controlled cooling off, not a freefall. Most homeowners have equity, and loans are solid, so we’re not dealing with a foreclosure crisis, just a market working toward equilibrium.

For many, this balanced scenario is actually a welcome relief... It’s a chance for normal people (not just cash investors) to buy and sell homes under reasonable conditions.

To wrap up, the first week of August finds us in a housing market that’s cooler than the past frenzy but warmer than a dead slump... A “Goldilocks” middle ground. More inventory and moderate prices are opening up opportunities, even as higher rates keep things in check.

Here’s to a productive week ahead, armed with knowledge and a positive outlook!

Sources

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