The median price dropped from $449,000 to $435,000 and the median amount of time a house spent on market increased from 37 to 42 days. National inventory jumped by 27%.
Granted, there is a long way to go before housing inventory levels get back to where they were before COVID-19. In June 2019, there were 53.2% more homes on the market.
Newly constructed home prices are also showing signs of easing. In June, new home prices dropped to $402,400, down 9.5% from May, although that was still 7.4% higher than the same time last year. Less than half of June prices were below $400,000, down from 55% just one year prior.
Lumber prices dropped below $600 in early July, potentially offering builders some more flexibility in their pricing strategies.
Another bright spot for buyers is the possibility of massaging the price down during final sales negotiations. As the market settles into a better balance between supply and demand, buyers are more selective, and sellers may have to make compromises. Nearly 15% of sellers cut listing prices in June, versus just 7.6% a year earlier.
Despite these market improvements, homes are still becoming more unaffordable, particularly for first-time buyers. The rate of price growth is still near 20% - or more than twice overall inflation.
Furthermore, mortgage interest rates have climbed to almost double the historic lows of 2021, pushing monthly payments up as much as 60%. Odds are mortgage rates will continue upward as the Federal Reserve fights inflation by raising its own short-term baseline interest rates.
Buyers should rate-test their budgets, so that they know how to react in case mortgage rates climb again, as they are likely to do heading into the fall and winter.