Median home prices dropped in June. Is the market shifting?

The median list price for a home in the United States dropped last month compared to a year ago, albeit only slightly at 0.9%. This is according to Realtor.com’s latest report, which shows the small sign of relief for buyers since the real estate website began its research in 2017. 

The national median list price was  $445,000 in June, down from a record high of $449,000 in June 2022. Meanwhile, there were 7.1% more homes for sale in June compared to the same time in 2022. This means there were 41,000 more homes available to buy on a typical day this past month compared to one year ago, according to the report. 

The typical home spent 44 days on the market this June, which is almost two weeks longer than the same time last year.

It would seem that the market may be showing signs of cooling, but real estate is local, down to the neighborhood and block. In Cincinnati, Coldwell Banker real estate agent Scott Oyler just helped his seller navigate multiple offers on a five-bedroom house listed this weekend at $625,000. 

“Our market remains hot,” Oyler said of Cincinnati, noting that inventory remains low and prices remain high.

With high interest rates, does it make sense to buy that house now?

With high interest rates, does it make sense to buy that house now?

If a homeowner is in it for the long haul, refinancing when rates fall could be the answer.

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According to Realtor.com, housing prices in Cincinnati grew by 20% in June 2022 compared to a year ago, to a median price of $390,000. In Austin, Texas, the median price fell 7% year over year to $580,000. 

Higher mortgage interest rates means homes remain expensive, and despite the decrease in median prices in some areas, interest rates have made homes less affordable.

Compared to June of last year, the monthly cost of financing 80% of the typical home increased by about $258, or 12.6%. This far outpaces wage growth at 4.3% and inflation at 4%. 

Higher interest rates are also responsible for the low number of new listings as homeowners are reluctant to give up rates they obtained at the 3% range to trade for another mortgage now in the 7% range.