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US Housing Market Shift: From Seller's Advantage to Buyer's Leverage

US Housing Market Shift: From Seller's Advantage to Buyer's Leverage

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 The US housing market has experienced a dramatic freeze over the past 48 hours, evident in the most recent data released. New home sales in May dropped sharply by 13.7 percent from April, reaching a seasonally adjusted annual pace of 623000 units. This is a 6.3 percent decline compared to the same period last year. The South was hit hardest, with sales plummeting 21 percent month over month and 15.5 percent year over year. Only the Northeast managed to see any increase in new home sales. Despite a jump in housing supply, now at roughly 507000 new homes available, buyer hesitation has led to a market that is shifting from the seller’s advantage of previous years to what is now essentially a buyer’s market, with 9.8 months of inventory on hand. Anything above six months typically offers buyers more leverage, marking a distinct turn from the rapid price gains seen after the pandemic[1].

Zillow’s June forecast now estimates home values will fall by 1.4 percent this year. The key factors are rising inventory, high mortgage rates, and ongoing concerns over the labor market. Although inventory is up and sellers are returning, sales activity remains stagnant, preventing price growth. Existing home sales are expected to post a modest increase of 1.9 percent for the year, reaching 4.14 million, but this trails behind the pre-pandemic momentum. Rents are predicted to edge up, with single-family rents forecasted to rise 2.8 percent and multifamily rents 1.6 percent for 2025, but both measures have been revised downward from earlier expectations, a result of more new construction and rising vacancy rates[3].

New listings saw a brief increase this spring, but the trend reversed in May with a 1.4 percent monthly decrease, which bucks the typical seasonal pattern. Despite this, overall listings remain higher than in 2023 and 2024, yet they still lag behind pre-pandemic levels. Industry leaders are responding by offering incentives such as mortgage rate buydowns and improved concessions to encourage sales, while developers focus on more affordable, entry-level homes to address changing buyer demand. Overall, consumer caution and affordability concerns remain the dominant forces shaping today’s housing market[1][3][5].

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