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"US Housing Market Stabilizes Amid Affordability Challenges"

"US Housing Market Stabilizes Amid Affordability Challenges"

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 The US housing market over the past 48 hours shows early signs of stabilizing after several unpredictable years. Nationally, experts report sellers are outpacing buyers by the widest margin since 2013, with 36 percent more sellers than buyers, reflecting continued uncertainty. However, research from Ned Davis and the Department of Commerce suggest the worst of the imbalance may be easing, as housing supply is expanding and projected to add about 1.3 million fresh units this year.

Home prices, though historically elevated, are no longer rising rapidly. The latest median US sales price sits at 410,800 dollars at the close of Q1, down from a 2022 peak of 442,600 dollars. Recent weeks show roughly 42 percent of homes nationally are undergoing price reductions prior to sale, a figure that has remained steady, indicating lingering affordability challenges. Even so, housing now appears more affordable relative to replacement costs, signaling incremental improvement for buyers.

Mortgage rates, a crucial driver, have dipped to new lows for the year in major regions like Dallas, where a 25 percent jump in mortgage applications was recorded compared to last year. Despite this, the number of new home listings is declining sharply in some urban markets, with inventory peaking two to three months earlier than usual. Financial institutions like Fannie Mae now forecast rates to end the year near 6.5 percent, with a gradual decline into 2026 expected by most analysts. This has started to reduce the so-called lock-in effect, where homeowners hesitate to move due to fear of higher rates, potentially unlocking more inventory for consumers.

Supply chain pressures remain, with tariffs and immigration policy shifts raising replacement costs for both homebuilders and buyers. Regional differences persist, with notably stronger inventory growth in the western United States, while the Northeast lags.

Industry leaders are responding with cautious optimism. Many are investing in new construction and digital sales platforms, while robust lending standards are helping avoid wider disruptions seen in past cycles. Compared to last year, buyers appear more active and sellers more willing, suggesting the sector is poised for slow but steady normalization, provided economic and regulatory trends remain stable.

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