Home price news? Softening, but nothing to write home about

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Published Date 7/8/2024

It’s a slow burn. While home prices are still higher than they were a year ago, some of the heat is beginning to dissipate, evidenced by several new reports showing the price gains are shrinking and home sellers are starting to give in after a stagnant spring market, according to CNBC’s Diana Olick.

“For the first time since the start of the Covid-19 pandemic, when home sales ground to a halt, the typical house sold for slightly less than its asking price — 0.3% lower — during the four weeks ended June 23, according to real estate brokerage Redfin. A year ago at that time the typical home was selling at list price. Two years ago it was selling at about 2% above list price,” she reports.

This has no resemblance to a housing market crashing, but let’s just say a tiny edge is slowly being removed. “A little less than two-thirds of homes still sold over asking price in the last month; that is, however, the lowest share since June 2020,” Olick says. “While most sellers are still listing their homes at higher prices than comparable homes sold for a year ago, some are conceding that they simply can’t command those prices.”

The real bottom line? Mortgage rates remain stubbornly high for the third straight month, and May’s home prices continued to follow the spring trend upward — now 47% higher than they were in early 2020, with the median sale price now five times the median household income.

CNBC will report on data next week from a different index by ICE Mortgage Technology. So far it shows annual home price growth slipped to 4.6% in May from 5.3% in April — the slowest growth rate in seven months.

And people are finally beginning to slap their homes on the market, which is leading to the cooling in prices. The biggest news is that total active listings are now 35% higher than they were at this time a year ago, according to CNBC. “To put that in perspective, however, even after the recent growth, inventory is still down more than 30% from typical pre-pandemic levels,” says Olick. So no reason to pop the bubbly quite yet unless you find a needle in a haystack.

Savvy agents are saying that some buyers think they can get a deal because they’re hearing the market is cool, and some sellers think every home will sell for top dollar no matter the condition. The only truth in all this is that everything depends on the house and the location. As usual.

CNBC, TBWS

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