In the past 48 hours, the US housing industry has shown signs of stabilization after months of volatility. Inventory is up significantly, with over 1 million homes for sale nationwide, representing a 15 to 20 percent increase in listings compared to this time last year. This supply surge has shifted the market toward balance, ending years of ultra-tight conditions and bringing inventory back to levels last seen before the pandemic.

At the same time, mortgage rates have drifted lower, now hovering in the mid 6 percent range for a 30 year fixed loan. This is down from peaks above 7 percent earlier in the year, easing pressure on buyers. The Federal Reserve’s recent rate cut in September is credited with contributing to this decline. However, rates are still well above the record lows of a few years ago, so affordability remains a challenge for many.

The pace of home sales remains subdued, sitting at an annual rate of around 4 million units, which is the slowest level in three decades. Many homeowners with existing low rate mortgages are reluctant to move. In contrast, new home sales have picked up, fueled by builders offering incentives and price adjustments to attract buyers. Contract activity is strongest in the mid tier and luxury segments, with 11 percent more homes going under contract year over year in September. Cash buyers now account for nearly one in three purchases nationwide, especially in states like Texas, West Virginia, and New York.

Pricing remains stable, with the median single family home listing price at 455,749 dollars and closed prices up 3.5 percent year over year. However, increasing inventory and longer sale timelines are prompting more sellers to cut prices, with price reductions up over 21 percent from last year.

Rental markets are also adjusting, as rental listings rose almost 22 percent and median rents declined 2.2 percent, reflecting greater options for tenants.

Despite these shifts, consumer sentiment is muted. Surveys show nearly 70 percent of Americans feel it is a bad time to buy a home, citing persistent affordability issues.

Industry leaders are responding by boosting listings, offering buyer incentives, and accepting lower margins to adjust to buyer expectations in a more competitive and balanced market. Compared to reporting from earlier this year, the recent improvements in inventory, moderated pricing, and slight relief in mortgage rates mark a subtle but meaningful shift in the US housing market’s trajectory.

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This content was created in partnership and with the help of Artificial Intelligence AI