US home asking prices fall 2.5% in June, steepest drop since 2017

US home asking prices fell 2.5% year-over-year in June to a median of $430,000, the steepest decline in Realtor.com data since 2017, as sellers priced realistically and buyers responded with the longest stretch of pending-sales growth in five years.

"Eight straight months of falling prices and seven straight months of rising pending sales are not a contradiction," said Danielle Hale, chief economist at Realtor.com. "Sellers are reading market conditions and are pricing accordingly from the start rather than listing high and cutting later."

Pending sales rose 3.7% from a year ago, extending a growth streak to seven consecutive months — the longest since December 2020 through June 2021. Contract cancellations came in at 6.9% of pending sales in April and May, below the 7.3% rate a year earlier, suggesting buyers are following through on deals. The median home spent 53 days on the market, unchanged from a year ago and ending a 26-month streak of slower selling times.

For a buyer purchasing a $430,000 home with a 20% down payment and a 6.49% mortgage rate, the typical monthly payment was $2,172 — roughly $132 less per month than a year earlier, when the median price was $440,950 and rates averaged 6.82%. The affordability improvement is drawing buyers back into a market that had been stalled by elevated borrowing costs and stubbornly high prices.

Regional Divergence Widens to a Four-Year Gap

The national headline masks a sharp regional split that has been building since prices peaked in June 2022. In the West, asking prices fell 4% year-over-year and are down 7.3% from the 2022 peak. The South posted a 2.5% annual decline and a 3.5% cumulative drop from four years ago. By contrast, the Midwest held flat year-over-year and has gained 10% since June 2022, while the Northeast slipped just 1% annually and is up 12.6% from the peak.

"The two Americas story in housing is now four years in the making," said Jake Krimmel, senior economist at Realtor.com. "In the West and South, prices gave ground back as affordability limits were tested. In the Midwest and Northeast, supply stayed tight enough and demand strong enough that prices kept climbing even through a historic rate shock."

Among the top 50 metro areas, median list price per square foot fell in 33. The steepest declines were in Austin, Texas, down 8.2%; Memphis, Tennessee, down 6%; and Buffalo, New York, down 5.2%. On the other end, Providence, Rhode Island, posted an 8.7% gain, followed by Indianapolis at 4.9% and New York at 3.4%.

Inventory Growth Slows as Sellers Stay Put

Active inventory reached 1,102,615 listings in June, up 1.9% from a year ago but still 11.3% below typical 2017-2019 levels — a slightly wider gap than the 10.4% shortfall recorded in May. New listings rose 2.4% year-over-year to 463,480, led by a 12.6% surge in the Northeast. Delistings — homes pulled from the market without a sale — fell nearly 10% from a year ago and now represent roughly 5% of active listings, near their lowest share since last year's surge began.

The share of listings with a price reduction stood at 18.8%, down 1.9 percentage points from a year ago even as it ticked up from May's 17.5% in a typical seasonal pattern. The data suggests sellers are pricing lower from the start rather than cutting after listing.

Heading into July, when the market typically slows, Krimmel said the leading indicators are holding. "We do not expect the market to stall out like it did last summer," he said. Mortgage rates have settled near 6.5% after a spring roiled by inflation concerns and geopolitical uncertainty, providing a stable backdrop for the traditional seasonal cooldown.

This article is for informational purposes only and does not constitute investment advice.