Introduction

The sales and new listings of houses have been tapering off, while the prices of houses have also started to slow down. While these indicators show bearish trends, there has been recent good inflation data which has boosted bond market and mortgage rates are below 7% for the first time in a long time. This raises the question: have we gone beyond the highs of mortgage rates and what does this mean for the housing industry? It is time to take a closer look at the newest information available to get the current picture of the market situation.

Inventory and Listings

Inventory Trends

To date, there are 61,000 unsold single family homes on the market nationwide, a very marginal change from last week. Inventory is 38. It stood at 5% more than in the previous year; however, it was 32% below the pre-pandemic level of 2019. Although new and existing home inventory is rising in every state, many areas continue to be relatively short on homes for sale than before the pandemic. More homes are listed for sale in only a handful states including Florida, Texas, Oklahoma, Arkansas, and Idaho as compared to the year 2019.

Impact of Mortgage Rates on Inventory

In the past, high mortgage rates have pushed up the inventory. For example, in the year 2022, the rates from June to November were on the rise and thus caused a steady increase in the inventory. But this year with the mortgage rates slightly falling it will be interesting to see if this trend will be maintained or if the inventory growth will slow down in the summer as it usually does.

New Listings

New listings were also down during the week of July fourth, with 57 thousand new listings for single family homes, and also an additional 11 thousand immediate sales. New listings have also gone down to 6% as compared to the previous year for the same week. The share of new listings that sold within a month of their being posted, another marker of demand, has also been falling since early May to only 16%.

Sales and Contracts

Weekly New Contracts

The week that was by the holiday showed 58,000 new contracts which were in line with the last two years in this period. Still, the overall sales rate remains stagnated with no visible improvement in the sales turnover. Currently there are 383 thousands of single-family homes that are in contract, this is the same as last week and only 1% more than last year.

Pending Sales and Mortgage Rates

If mortgage rates remain to fall, then there may be a rise in the pending sales. Hence, if rates decline in July and August, new pending sales might increase from 65,000 to 70,000 per week, revealing some improvement in sales. The pendings data will be something to watch for as it will be able to indicate a change in the market in case the mortgage rates fall below 6. 75%.

Pricing Trends

Median Prices

The median asking price of homes listed this week is $450,000, identical to that of the same week one year earlier. Nonetheless, new pending contracts’ median price has declined by 1. 5% for the week, while continuing to be 3% above the level of the same week last year. This trend shows the slowing down in the rate of price increase which is a clear sign that with the onset of the next season, home prices will fall.

Price Reductions

Currently, 38. Statistics reveal that 3 percent of the listings have cut down their price from the listed price. This is above any July in the recent years thus pointing to poor demand. If mortgage rates come down, we may expect dfs to slow down in the form of moderating price reductions.

Conclusion

The housing market is in a precarious position, inventory and new listings are showing signs of slowing down, while mortgage rates are the tiniest bit lower. The following few months will be very decisive as to whether inventory growth will be stagnated or will still increase. Other factors that are likely to be important include price trends and the trends in the new pending sales if the mortgage rates are expected to fall further.

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**Note:The above blog can be said to be a critique on the current trends in the housing market using recent data. It includes the information on the inventory, sales, and the price trends of the homes and also presents the possible effect of the changing mortgage rates in the market.