Frenzied U.S. Residential Market May Be Passed Its Peak

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Although asking prices for U.S. homes continue to rise, there are signs that the red-hot housing market has passed its peak, according to a report Thursday from Realtor.com.

The median listing price was up 12.2% in the week ending Saturday, compared to the same time in 2020, the data showed. That’s the 45th week in a row in which price growth was in the double digits.

Despite the rise, the pace of annual price growth has been slowing since its high of 19% in early April, according to the report. If the downward trend continues, prices could return to a “more typical seasonal price pattern” in the next six months.

Additionally, new listings rose 4% year over year last week, as sellers look to take advantage of the frenzied market, the report found. The increase in options has helped curbed prices, as well as giving buyers more options.

“If inventory declines continue to improve, we could see more families moving before fall,” George Ratiu, Realtor.com’s senior economist, said in a statement. “For the market as a whole, additional inventory should bring more balance and boost affordability for buyers.”

Still, overall, total inventory was still down 42% year over year last week, the data showed. But the gap is narrowing, as total listings were down 44% in the week ending June 12 and 54% in early April.

“Home inventory remains tight, but there is a clear improvement,” the report said.

The number of days a home is on the market is also starting to moderate, potentially giving buyers more time to negotiate.

Time-on-market was 33 days faster last week compared to the same time in 2020, the data showed. For buyers, that’s improved from a May peak, when homes were selling 39 days faster than the prior year.

“Buyers should still expect to act quickly on their desired homes, but we are seeing signs that the peak of the frenzy may soon be behind us,” the report said.

Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp.

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source https://www.realtor.com/news/trends/frenzied-u-s-residential-market-may-be-passed-its-peak/