Week of June 2: National housing data is giving us a mixed bag of sun and clouds (with a light breeze of optimism). Here’s the scoop: home sales are cruising at a leisurely pace – the latest count is about 4.00 million existing-home sales (annualized) for April, which is roughly 75% of the pre-2020 “normal” level. In plain English: the market’s not crashing, but it’s not the frenzy of a couple years ago either (remember those 15-offer weekends?). Buyers actually have a bit more breathing room now because inventory has finally opened up.
The number of homes for sale nationwide is about 20% higher than this time last year – in fact, housing supply just hit a five-year high. Yes, you heard that right: a five-year high.
It’s like the housing gods refilled the cookie jar after years of us scraping the bottom. More listings mean more options and gasp a touch more negotiating power for buyers in many areas.
💵 Calm & Reasonable?
The price scene is relatively calm and reasonable (words we haven’t uttered in a while). The national median sale price is hovering around $414,000, barely up (~1.8%) from a year ago. Think of it as home prices trading their Red Bull for iced tea – still caffeinated, but far from the jittery jump of previous years.
In fact, sellers are getting a reality check: roughly 18% of listings had a price reduction in April, the highest rate for an April since at least 2016. Homes are also taking a tad longer to sell – median days on market is about 50 days now, four days slower than last spring.
This is good news for buyers (no need to decide on a house in the first 5 minutes) and a signal to sellers that those sky-high pandemic price hikes are officially yesterday’s news. A balanced, healthier market? It’s inching closer, and we are here for it.
🏦 One Word: Mortgages
So why isn’t the market hotter, especially with summer upon us? One word: mortgages. Mortgage rates are still camped out in the high-6% range, and that’s putting a bit of a damper on the party. Even though rates aren’t as wild as they were at their peak, they’re high enough that a lot of buyers are playing wait-and-see.
It’s a bit of a staring contest: buyers watching rates, sellers watching buyers, and everyone occasionally glancing at the Fed like, “Well? You gonna do something?”
As Chief Economist Lawrence Yun of NAR noted, despite millions of new jobs and better supply, home sales remain stuck at about three-quarters of their usual pace because would-be buyers are held back by financing costs.
The demand is there – people want homes – but many are holding off until that monthly payment becomes a touch more palatable. It’s like the housing market is doing the limbo: how low do the rates need to go to get the buyers to dance?
⏩ Future Outlook
The outlook ahead has a cautiously hopeful glow. Analysts (with their crystal balls and spreadsheets) predict that if rates even inch down a bit, activity could perk up noticeably.
In fact, Zillow is forecasting around 4.12 million home sales in 2025, which would be a modest 1.4% uptick from 2024 – not exactly a blockbuster summer surge, but a step in the right direction.
Early signs this past May already hint that buyers are starting to tiptoe back as they adjust to the “new normal” rates. Think of the current market as a pool party where everyone’s dipping a toe in the water. All we need is a little rate relief and we might see a few cannonballs. 🏊♂️
But even if that takes a while, we’re a long way from the crazy sellers’ market of yore – and that’s not a bad thing. A summer where buyers and sellers actually negotiate and deals take a little longer? Consider it the season of real estate chill.
So, keep an eye on those economic forecasts, stay nimble, and don’t forget to enjoy some actual summer sunshine in between all those showings and closings. The market may not be red-hot, but it’s steady – and dare we say, pretty pleasant – as we sail into the early summer weeks. 🏖️