Existing-home sales steadied, as climbing inventory improves balance
Existing-home sales steadied in July, rising 1.3% to a seasonally adjusted pace of 3.95 million, lagging 2.5% behind their year-ago pace. Even as Realtor.com® data for the same period showed the number of homes on the market hit a five-year high—a significant milestone on the road to recovery—the number of homes for sale was 30% lower than in the 2017 to 2019 time frame.
Because home sales remain well below the 5.4 million annual rate that was the norm in those years, the housing market is more balanced than would otherwise be expected with such a sizable inventory deficit. The median sales price dipped from June’s seasonal peak to $422,600 and was up 4.2%, roughly on par with June’s 4.1% gain. Similarly, months supply was 4.0, joining June’s 4.1 for a second consecutive month to start with a 4.
Mortgage rates have dipped, improving the outlook
Mortgage rates have moved in a buyer-friendly direction after playing the foe for much of the peak homebuying season. The rate for a 30-year fixed mortgage topped out at 7.22% in early May and remained near 7% for the better part of June—when many July homebuyers would have locked in a mortgage rate.
Easing inflation helped accelerate the decline in mortgage rates in mid-July, and rates currently hover near 15-month lows. This is likely to bode well for buyers in the fall—a typically advantageous season for home shoppers. The updated 2024 Realtor.com Housing Forecast expects mortgage rates to fall to 6.3% by the end of the year, which could mean a hotter fall season than is typical.
Local conditions vary
Already, we see variation across the country in housing activity. Inventory recovery in the South and West has helped soften relatively high asking prices in these regions. At the same time, affordable markets in the Northeast and Midwest continue to draw the attention of value-conscious home shoppers. This trend propelled Gahanna, OH—near the Columbus metro—to the top of the Realtor.com Hottest ZIP Codes for the second year in a row.