A pair of new data reports published today are highlighting a growing imbalance across the housing market.
A report from the Rocket Companies (NYSE: RKT) division Redfin discovered a considerable slowing the pace of home sales – during July, the typical home that went under contract was on the market for 43 days, from 35 days one year earlier and the longest span for any July since 2015. Pending home sales fell 1.1% from June to July to the lowest seasonally adjusted level since November 2023 while existing-home sales came in at a seasonally adjusted annual rate of 4.15 million for the lowest level in nearly one year.
This lethargy occurred while active listings of homes for sale in July were near the highest level in five years despite a 1.1% decline June – which was also the largest monthly seasonally-adjusted drop in roughly two years. New listings fell 0.4% month-over-month to the lowest seasonally adjusted level since March 2024.
And while sales activity slowed, the median home sale price rose 1.4% year-over-year in July to $443,867, the highest July level on record. Home price growth has been accelerating recently – prices rose 0.9% year over year in June and 0.7% year over year in May.
“Supply is starting to fall because prospective sellers are choosing not to list after seeing their neighbor’s home linger on the market or sell for below the asking price,” said Redfin Senior Economist Asad Khan. “Some existing sellers are also pulling their homes off the market, opting instead to rent their house out or hold off on a move altogether – especially if they bought at the peak of the pandemic market and are worried about taking a loss.”
Separately, a new market report from Zillow (NASDAQ: Z, ZG) found home values were down in half of the nation’s 50 largest markets over the past year. Most of these declines were situated in the South or West. At the same time, home values rose over last year in 25 major markets, mostly in the Midwest and Northeast.
Zillow added that home value appreciation is nearly flat at the national average, rising just 0.2% over the past year. Sellers cut prices on 27.4% of listings in July, the highest share since Zillow began tracking this metric in 2018. The price cuts were more common in the South and the Mountain region and less widespread in the Northeast and West Coast markets that are more favorable to sellers.
“Perhaps more than ever, whether it’s a good time to buy depends on where you live,” said Kara Ng, senior economist at Zillow. “A defining trait of this market is that buyers are gaining leverage that most of them can’t use, because cost barriers are too high. Buyers forced to the sidelines means less competition for those who can still afford it. Affordability is gradually improving where builders have been able to keep up with demand, showing why continuing to build is so critical. It’s not just about giving buyers power, it’s enabling them to use it.”
