June 2024 Market Overview: Existing-Home Sales Decline

In June 2024, the real estate market experienced a notable downturn, with existing-home sales plummeting by 5.4%, making it the fourth consecutive month of declines. This trend has been observed across all major U.S. regions, including the Northeast, Midwest, South, and West. While the Northeast, Midwest, and South recorded year-over-year decreases, the Western region remained relatively stable, showing no significant change in sales figures.

Amidst this decline in sales, the market witnessed an unprecedented rise in median sales prices, reaching a record high of $426,900. This is the highest median sales price ever recorded, indicating significant inflation in the housing market despite the drop in sales numbers.

Market Dynamics Shift: From Seller’s to Buyer’s Market

The real estate landscape appears to be shifting from a seller’s market to a buyer’s market. This transition is evident as homes are staying on the market longer, and sellers are receiving fewer offers than in previous months. Buyers are becoming more cautious, insisting on thorough home inspections and appraisals before proceeding with purchases.

This increased due diligence by buyers is contributing to a rise in inventory levels nationally. The inventory of unsold homes grew by 3.1% month-over-month, culminating in 1.32 million units available at the end of June. At the current sales pace, this represents approximately 4.1 months of available inventory.

Factors Influencing Buyer Behavior and Inventory Trends

Interestingly, while existing-home sales have been sluggish, the Pending Home Sales Index saw a rebound, increasing by 4.8% in June compared to the previous month. This uptick suggests potential future sales growth, highlighting a possible recovery in the market as buyers navigate current conditions.

Additionally, mortgage rates have slightly decreased, with the 30-year fixed-rate mortgage averaging 6.77% as of mid-July, compared to 6.89% the previous week and 6.78% one year ago. This marginal decrease in mortgage rates might encourage more buyers to enter the market, potentially boosting future sales.

Impacts of Regulatory Changes and Legal Settlements

The National Association of REALTORS® (NAR) has reached a significant antitrust settlement, agreeing to pay $418 million. This settlement will bring about changes in MLS rules effective August 17, 2024, which will alter how broker commissions are handled. These changes are expected to impact the way real estate transactions are conducted, potentially benefiting buyers with greater transparency and fairness.

Moreover, the U.S. Department of Veterans Affairs has temporarily suspended rules that prevented veterans from paying real estate agents when purchasing homes. Effective June 12, 2024, this change aims to help veterans compete more effectively in the housing market. Both of these regulatory shifts indicate a broader trend towards making the market more equitable and accessible.

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