In June, the national median list price fell 2.5% year over year to $430,000, the steepest annual decline since 2017, while pending home sales rose 3.7% from a year ago, marking a seventh straight month of gains. That’s according to Realtor.com’s latest housing update.

Here are the other key takeaways from the report:

• Prices are broadly weaker, not just shifting – Price per square foot also fell 2.1% year over year, confirming the drop isn't just a function of different types of homes coming onto the market — actual home values are cooling.
• Inventory keeps climbing, but slowly – Active listings rose 1.9% from a year ago (and 4.1% from May), though supply remains 11.3% below typical pre-pandemic (2017–2019) levels.
• Homes aren't taking longer to sell, for the first time in over two years – The typical home spent 53 days on the market, identical to a year ago, ending a 26-month streak in which homes had been sitting longer each year. Pending home sales rose 3.7% year over year, the seventh consecutive month of annual gains.
• Sellers are adjusting to reality – 18.8% of listings saw a price cut in June, down from a year ago, suggesting more sellers are pricing realistically from the start rather than cutting later.
• Buyers are sticking with their contracts – Contract cancellations held at 6.9% of pending sales, down from 7.3% a year ago, suggesting buyers are more confident as the market stabilizes.

Market outlook:

June was largely a month of continuity for the economy and stability for the housing market. That is no small thing after a tumultuous spring that left us whiplashed over mortgage rates and bracing for the economic fallout of rising inflation and the war in Iran. This month, the shocks gave way to a settled, if unspectacular, backdrop: Mortgage rates hovered around 6.5% all month, inflation firmed but largely as expected—landing as confirmation rather than surprise to markets and consumers alike—the labor market steadied further, and the Fed held rates unanimously while signaling a more hawkish posture ahead. It’s not necessarily a rosy picture, but it’s one that looks more steady than just a few months ago.

The housing data told the same story of continuity. Every trend we tracked through the spring carried into June: New listings up, especially in the Northeast; pending sales up for a seventh straight month; and asking prices down, due to seller realism rather than distress. It was a no-news-is-good-news June. While it may seem obvious now, this was far from a foregone conclusion just a few months ago. We spent the spring bracing for another false start and then a second straight Cruel Summer. That the housing market held resilient was not inevitable in hindsight.

June’s top storylines, according to the data:

• Asking prices fell again at a record pace—down 2.5% year over year. That’s the steepest annual drop in Realtor.com® data since 2017 and the eighth straight month of declines. List prices per square foot fell 2.1% and are declining in 33 of the top 50 metros.
• The 26-month streak of homes taking longer to sell is over. Median time on the market held at 53 days in June—exactly matching last June—ending more than two years of consecutive year-over-year slowing. The median time a home spends on the market is now identical to the pre-pandemic norm.
• Spring’s momentum looks to carry into summer. New listings rose 2.4% year over year, and pending sales grew for a seventh straight month (+3.7% YoY)—a streak not seen since January through July 2021. Contract cancellations held below last year (6.9% vs. 7.3%), and there are no signs of a repeat of last summer’s delisting surge: Delistings are down nearly 10% year over year in June.
• Two Americas, four years from peak prices. Since list prices peaked nationally in June 2022 at $449,000, asking prices are down 7.3% in the West and 3.5% in the South—but up 10.0% in the Midwest and 12.6% in the Northeast. Prices since the 2022 peak have fallen in 28 of the top 50 metros and risen in 22: a true measure of how fragmented housing has become since mortgage rates climbed.

Key questions:

Q: Mortgage rates ended the spring higher than many hoped, and with a new Fed chair signaling concern about inflation, rate relief is probably not forthcoming. Can the housing market keep weathering the storm?

A: So far, so good—but keep in mind that weathering the storm is far from thriving. The central concern was that volatility and higher mortgage rates would freeze activity at some point this year. That fear has yet to materialize. Mortgage rates have sat around 6.5% for six straight weeks now, after a roller-coaster spring. Underlying activity has hardly flinched, with new listings up 2.4% and pending sales increasing for seven straight months. Even though mortgage rates have strayed above expectations and are likely to remain elevated, the song has remained the same for the past few months.

Q: Prices are falling—which sellers don’t love—and mortgage rates have steadied higher than expected, which isn’t what buyers were hoping for. Is this the ‘correction’ people keep predicting, and how do we know we’re not in for another Cruel Summer?

A: The listing price drops should be characterized as normalizing, not an outright market correction. Asking prices were never going to climb forever without incomes rising sharply or rates falling sharply, and neither happened, so prices are giving back ground: down 2.5% nationally, broadly, with the steepest declines in the South and West. But this isn’t a Cruel Summer sequel, because the buyer-seller dynamics are more consistent with negotiation than a standoff. Unlike last year, sellers are willing to take a slight haircut to move, and buyers get a little relief on price to offset rates that settled higher than hoped. Each side gives a little. And the surest sign this isn’t distress: Pending sales are up again by a healthy margin. Homes are still selling.

Q: What should we be monitoring heading into July?

A: July is when the market traditionally takes its foot off the gas, so the question is how much will things decelerate? Spring listings age, buyer urgency fades, and activity slows. June already shows the first signs: Price cuts ticked up to 18.8%, and new listings slipped slightly from May—though they remain above last year. We’ll judge the probable summer slowdown by three things: whether homes start sitting longer, whether price cuts accelerate beyond the usual seasonal ramp, and whether new listings genuinely pull back or flatten out.

Click HERE to see more statistics and read the full article.

Original Article by: Jake Krimmel, Realtor.com