Existing home sales in the US rose 2% in July, signaling a modest rebound in buyer activity.
However, home price growth slowed to just 0.2% for the month, even as inventory levels reached their highest point since May 2020.
While affordability remains a challenge, Redfin CEO Glenn Kelman says the housing market is showing signs of recovery, with lower mortgage rates and softening prices offering some relief to buyers.
Mortgage relief is nudging home buyers back
In a CNBC interview this week, Redfin chief executive Glenn Kelman said even modest declines in mortgage rates are making a noticeable impact.
With rates easing slightly, the average buyer now saves around $20,000 on a home purchase and $200 per month on mortgage payments.
This financial breathing room is encouraging more buyers to re-enter the market. Kelman expects this momentum to build gradually over the next 6-9 months.
While affordability remains a hurdle, the combination of slower price growth and lower monthly costs is creating a more favorable environment.
Redfin reports up to a 35% increase in offers being written, suggesting buyer confidence is returning, albeit from historically low levels.
Inventory trends are stabilising the market
According to CEO Glenn Kelman, the housing market saw a rare buildup of inventory over the summer, with homes taking longer to sell – six weeks on average compared to five weeks last year.
This shift led to price softening, particularly in overheated Sun Belt markets like Texas and Florida. However, sellers are now pulling back amid broader economic uncertainty, slowing inventory growth to its lowest pace in 17 months.
Kelman describes the current landscape as “pretty well balanced,” with neither buyers nor sellers dominating.
While the affordability gap remains wide, the stabilization in inventory and pricing dynamics is helping to create a more predictable and navigable market for buyers.
Regional disparities are shaping buyer behaviour
On “Money Movers”, Kelman also noted that geography is playing a critical role in the housing market’s uneven recovery.
Cities like Pittsburgh, Milwaukee, and Cleveland are seeing home prices hold steady, while Sun Belt metros such as Dallas, Orlando, and Tampa are experiencing notable price declines.
In Florida, soaring home insurance costs – sometimes exceeding mortgage payments – are deterring buyers and cooling demand.
Kelman notes that the cost of homeownership now hinges on three factors: mortgage rates, home prices, and insurance premiums.
As climate-related risks drive up insurance costs, particularly in disaster-prone areas, buyers are becoming more cautious.
These regional disparities suggest that recovery will be patchy, with affordability and risk shaping local market trajectories.
All in all, while the housing market is showing early signs of recovery, full revival hinges on sustained rate relief, stable inventory, and regional affordability. Buyers are returning – but cautiously, and unevenly across the country.
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