As home sales across America increase and we track toward 4.03 million deals a year, the National Association of Realtors (NAR) says American buyers are waiting for the Federal Reserve to cut mortgage costs to give the market a boost.
NAR's latest data says the average price of a home in America was $422,800 at the end of May, which is 1.3% higher than 12 months before.
The rise represents the 23rd successive month of value increases.
Existing home sales moved higher by 0.8% in May compared with April, but it's still slightly down (-0.7%) from last May.
Single-family homes – the bellwether category for the US market – saw an increase of 1.1% in sales to a seasonally adjusted annual rate of 3.67 million, up 0.3% from May 2024. The median price for these homes is now $427,800.
Condos are under a little more pressure. Sales fell 2.7% to an annual rate of 360,000 units, down 10% from last May. However, the median price is 0.7% higher at $371,300.
The main concern for NAR is the increasing number of unsold homes, which is great news for buyers but a signal to sellers that they may have to temper price expectations if the trend continues.
NAR says there were 1.54 million homes on the market at the end of May – a 6.2% increase on April's numbers. At the current deal rate, it would take almost five months to sell these properties.
Just 12 months ago, there were only 1.28 million units on the market. So, inventory has built up by 20.3% since then.
Chief Economist at NAR, Lawrence Yun, joined an increasingly vocal lobby for the Fed to reduce interest rates from its current guidance of 4.25%-4.5%.
“The relatively subdued sales are largely due to persistently high mortgage rates,” he said. “Lower interest rates will attract more buyers and sellers.”
In a good sign for owners considering selling in late summer or the fall, he added: “Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory and a record-high number of jobs.”
According to a June 18 report from Freddie Mac, the average 30-year fixed-rate mortgage was 6.81%, just 0.6% lower than 12 months ago.
Here are four pieces of advice if you want to sell in the short-term, based on this NAR report:
Be competitive – With a 20.3% increase in inventory over the past 12 months, we're shifting to a buyers' market. Overpricing can lead to your home languishing on the market, potentially making it less attractive. Some agents may suggest pricing 5%-10% below market value to generate multiple offers. Consider this advice carefully. I'd be delighted to advise you.
It's showtime – Buyers have the luxury of being choosy right now, so your home needs to stand out. Invest in professional photography and consider staging your home. Declutter, depersonalize and make any necessary minor repairs or cosmetic upgrades.
Be flexible – Don't be surprised by offers below your asking price. Instead of rejecting them, be prepared to negotiate not only on price but also on terms, such as settlement dates and even inclusion of certain appliances or furniture. A quality realtor will look after your interests.
Use the experts – In a changing market with increasing inventory, commissioning an experienced agent is critical. They'll give you accurate local market insights, set an appropriate price and develop a marketing strategy to reach your target audience. When the time is right, they'll lead price negotiations. Again, I'd be more than pleased to assist you with your property needs.
Thinking of selling but unsure how to navigate this shifting market? Let’s chat! Our team is here to guide you through every step — from pricing to staging to negotiations — so you can sell with confidence and maximize your return. 📲 Contact us today to get started.
