Home Prices Fell in July 2024: What This Means for Buyers and Sellers

Home Prices Fell in July 2024 - The Home Atlas

In an unexpected turn, home prices fell in July 2024 for the first time during a period that is typically a peak time for real estate activity. This decline marks a significant shift in the housing market, offering potential opportunities for buyers while signaling a potential adjustment period for sellers. According to a recent housing report by Realtor.com, the national median list price decreased from $445,000 in June to $439,950 in July.

Home Prices Fell in July 2024

The Impact of Falling Home Prices

The fact that home prices fell in July 2024 has various implications for both buyers and sellers. This drop can be attributed to several factors, including a sluggish summer housing market and economic conditions that have caused potential buyers and sellers to hesitate before making any decisions.

Mortgage Rates Influence: Mortgage rates fell to their lowest since March, contributing to a slower pace of sales. Many buyers are holding out for potentially lower rates in the coming months, which has resulted in home sales moving at the slowest rate since 2020.
Price Adjustments on Listings: As a result of the hesitancy among buyers, prices were reduced on nearly 18.9% of listings in July, a notable increase from 15.5% the previous year. Realtor.com’s senior economist Ralph McLaughlin explains, “Sellers are becoming more grounded with patience and price expectations.” The share of listings with price cuts is the highest since 2022.

Regional Differences in Home Listings

While home prices fell across the board, the inventory of homes for sale has seen an increase, providing more choices for buyers. The total number of homes for sale in July was 36.6% higher than the previous year, marking the ninth consecutive month of growth.

Regional Trends: The South experienced a 47.6% increase in active listings, followed by the West with a 35.4% increase, the Midwest at 22.7%, and the Northeast at 14.7%. Cities like Tampa, Orlando, and San Diego saw the largest increases in the number of homes for sale.
New Listings Surge: Newly listed homes were 3.6% above last year’s levels. Seattle, WA, saw a significant increase of 37.3% in fresh listings compared to the previous year, indicating a rise in seller activity.

Understanding the Home Price Paradox

Despite the overall decline in home prices, the situation presents a paradox. The median price per square foot continues to rise, increasing by 3.1% compared to the previous year.

Smaller, Affordable Homes: The inventory of smaller and more affordable homes has grown, leading to a rise in the share of homes priced between $200,000 and $350,000. This category saw a 47.3% year-over-year growth, providing budget-conscious buyers with more options.
Stability in Larger Markets: While the national median list price decreased, it remained stable compared to last year, at $440,000. This indicates that the shift in the mix of inventory towards smaller homes may be impacting overall price perceptions.

Market Outlook: A Healing Market?

The fact that home prices fell may indicate a “healing” market, as more inventory becomes available and prices adjust to more sustainable levels.

Extended Days on Market: The typical home spent 50 days on the market in July, five more days than the previous year. This extended time on the market reflects the growing inventory and sluggish sales.
Future Expectations: Realtor.com’s economist McLaughlin predicts that selling activity will continue to normalize as mortgage rates potentially decrease in the coming months. An unusual uptick in sales might occur if the Federal Reserve decides to cut rates in September.

Kamala Harris Real Estate Policies

Kamala Harris real estate policies are set to transform the housing market significantly. As the presumptive Democratic nominee for the 2024 presidential race, Harris brings a wealth of experience and a progressive agenda that could reshape how Americans buy, sell, and live in their homes.

Opportunities Ahead

With home prices fell in July 2024, the housing market presents a unique set of opportunities and challenges for buyers and sellers. For those considering entering the market, this could be a prime time to find deals and take advantage of the increased inventory. On the other hand, sellers may need to adjust expectations and strategies to navigate this changing landscape.

The decline in home prices is not only a signal of market adjustments but also a reflection of broader economic influences. As the market continues to evolve, both buyers and sellers will need to stay informed and adaptable to make the most of these shifts.