Though the summer housing market is in full swing, buyer enthusiasm has been tempered by still-high housing costs. New, existing and pending home sales all fell in May as buyers remained on the sidelines, hoping for more affordable conditions later in the year. Mortgage rates ranged from 6.86% to 7.22% in the second quarter, which, coupled with high home prices, meant that home shoppers in many markets simply could not afford to participate. However, mortgage rates have since fallen to 6.77%, the lowest level since mid-March, upon June’s cooler jobs report and easing CPI data. Though mortgage rates have fallen more slowly than many had hoped, the recent trend is good news for hopeful homebuyers. 

Seller activity continued to pick up through the second quarter, and active inventory grew 36.7% year-over-year in June, the eighth consecutive month of annual inventory growth. Moreover, affordable inventory surged 50% in the same period, driven by greater availability of smaller and more affordable homes in the South. Overall, affordable housing markets in the South, Midwest and Northeast continue to thrive in today’s housing environment. Buyer demand in these areas has kept inventory levels relatively low and time on market snappy. 

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