The median price of a home sold in July was $415,000, up 3.8% from a year earlier. During the month, slightly more than 5,300 homes were sold, according to MLS.
Home listings now represent more than three months of sales — still a market balanced to the advantage of sellers, but nowhere near the tilt of 2021 and 2022 when buyers often found themselves bidding against each other and median prices were up in double digits.
Experts say a six-month supply of listings offers a generally level playing field.
But the number of listings fell as mortgage rates rose in late 2022 and 2023, partly because of “the lock-in effect.” Many homeowners balked at the idea of selling a home they had purchased — or refinanced — at a dramatically lower rate.
Mortgage rates started climbing after the Federal Reserve started raising its benchmark rate in 2022 in an effort to tame inflation, rate hikes as aggressive as any the Fed has enacted in the past. And while mortgages are set by other market forces, they ultimately hinge on the Fed rates.
In late 2021, the average 30-year mortgage was lower than 3%.
But the rates climbed through the next several years, finally cresting at nearly 8% last fall. After that, they dipped, but they are still higher than they were for more than two decades pre-pandemic.
Rates have averaged below 7% the past few months, and a lot of wannabe sellers may simply be getting used to the idea that they will not return to historically cheap levels, Ryan said. “Maybe people that have been on the fence about selling, in terms of the timing, have looked at the market and decided that the market is just what it is going to be.”
There’s still some rebalancing to do, said broker Kristen Jones Re/Max Around Atlanta: The balance of supply vs. demand is still more tilted to the advantage of sellers than it was in 2019.
But the higher mortgage rates have also pushed some would-be buyers to the sidelines.
So, the balance could shift back the other way, if the Fed starts lowering its benchmark rate and the mortgage rates drop in parallel, she said. “I believe that if or when rates drop below 6 or even 6.5%, we will see a lot of activity from would-be buyers.”
