Is the Housing Market Shifting in Favor of Buyers?

Potential buyers fed up with high prices sat out of the housing market in June, but the tide could soon be turning in their favor.

Existing home sales were down 5.4% from both the prior month and the same time last year, according to data from the National Association of Realtors (NAR) released Tuesday. Sales were lower than economists expected as prices hit record highs for the second month.

“Sales may be close to rock bottom as they approach Housing Bubble crash levels,” said Robert Frick, Navy Federal Credit Union corporate economist. “That’s cold comfort for Americans looking to become homeowners, especially as existing home prices hit a new high.”

Despite the dour situation last month, the outlook for buyers is improving.

Inventory Could Take Pressure Off Prices

There were 1.32 million units of single-family homes, townhomes, condominiums and co-ops, an increase of 3.1% from May. That marked a vast improvement—more than 23% higher—from the same time last year, when buyers were competing for the historically small number of homes for sale.

“We’re seeing a slow shift from a seller’s market to a buyer’s market,” said NAR Chief Economist Lawrence Yun in a statement. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers.”

High interest rates have discouraged sellers from listing homes, increasing competition among buyers and driving up prices. However, a growing number of homes on the market could change that.

Buyers have protested high prices by sitting out of the market, letting available homes pile up to the highest level since May 2020 and leading sellers to cut their asking prices.

“Despite more homes being listed for sale, actual home sales have not picked up,” wrote Doug Duncan, Fannie Mae chief economist, in a report this week. “We continue to expect home price growth on a national level to decelerate—but remain positive—over the near term.”