As the housing market rebalancing pushes on, existing home sales have declined every month in 2022, reaching the lowest level in the past two years in August. Buyers are unable to keep up with rising housing costs and sellers are unwilling to trade their low rates for much higher payments, causing both demand and supply to pull back — and sales to slow. Slowing home sales is giving the market a chance to catch up and find the new equilibrium.
The rate at which new listings are entering the market is slowing, contributing to a drop in sales as there are fewer homes available. However, even with lower inventory, home buyers who can still afford to buy in this market will have an easier time navigating the housing market this fall and winter. Now that the market is cooling, there is less competition per home, more time to make these critical decisions, and more negotiating power in the hands of buyers than at any point in the last few years. Sellers, on the other hand, are having to reset their expectations. In August the share of listings with a price cut peaked, at the same time that home value growth dipped into the negative, saving buyers from the stress of a bidding war and opening up opportunities for deals.