Mid-Year Real Estate Market Update: Trends and Insights

Hello Realtors,

As we transition into the third quarter of the year, let's take a closer look at the real estate market trends from the last two quarters and what we can expect moving forward.

Current Market Overview: The last week of June is typically the peak of the homebuying season. However, with the July 4th holiday approaching, we can anticipate a dip in activity across the board, including inventory and new listings. As we move into the second half of the year, activity and prices generally decline. Here's what the market looks like and what we can expect:

Home Prices and Inventory:

Home Prices: Currently unchanged, but likely to dip after next week. The seasonal peak is usually around June 30.

Inventory: Up 1.8% for the week, with 646,000 single-family homes unsold. This is a 39% increase from last year, indicating soft homebuyer demand. We expect inventory to continue rising until October, potentially peaking at around 700,000 unsold homes. If mortgage rates increase, this trend may be more pronounced.

New Listings and Seller Behavior:

New Listings: Around 71,000 new listings this week, down 1.5% from last week. Despite this slight decrease, there is no significant drop-off expected in July. The pace of new listings is not accelerating.

Seller Trends: We observe a mix of trends from 2022 and 2023. While there’s no substantial increase in sellers, inventory is building due to weak demand rather than an influx of new listings. If the job market deteriorates, we might see more sellers entering the market, but current data does not show this.

Pending Home Sales:

Contracts: There were 67,000 new contracts for single-family homes this week, slightly fewer than last week and unchanged from last year. This indicates stable but weak demand, leading to a consistent sales rate around 4 million annually.

Price Trends and Reductions:

Median Prices: The median price of new home sales this week is $395,000. This figure is expected to decline in the coming weeks. The median price of all homes for sale remains stable at $455,000. New listings' median price is $429,000, up nearly 4% from last year.

Price Reductions: Currently, 38% of homes on the market have taken a price cut, up 70 basis points from last week. While this increase is significant, it is not as steep as the 2022 rate. This trend points towards potential price stabilization or slight declines in the second half of the year.

Looking Ahead: Based on these trends, we anticipate a flat to slightly declining home price appreciation for the rest of 2024. While some indicators suggest price compression, it hasn't materialized yet. Keep a close eye on these trends to better navigate the market and advise your clients.

Stay Connected: We are here to support you and your clients through these market shifts. For any questions or further insights, please don't hesitate to reach out.

Thank you for your continued partnership and let's make the most of the opportunities ahead!