The further decline in mortgage rates has brought new changes to the real estate market. According to Freddie Mac data, the average rate for a 30-year fixed-rate home loan fell from 6.99% last week to 6.95% for the week ending June 13. This drop in rates has led to an increase in new home listings, fostering more interaction between sellers and buyers.

Freddie Mac's Chief Economist Sam Khater stated, "Mortgage rates continued to retreat this week, with the latest data showing the economy cooling to a more sustainable growth level. Although overall inflation data remains flat, housing inflation is rising, indicating that housing affordability remains a persistent challenge for homebuyers." For the past two months, mortgage rates have hovered around 7%, imposing significant financial pressure on potential homebuyers. However, as rates fall, sellers are quickly listing their homes.

Realtor.com® Senior Research Scientist Jiayi Xu noted, "Last week, mortgage rates dropped below 7% again, prompting more home sellers to return to the market, leading to an increase in the number of new listings." For the week ending June 8, new home listings increased by 8.0% year-over-year, compared to a year-over-year increase of just 2.1% the previous week.

Despite the Federal Reserve not cutting rates at its recent meeting, market expectations for future rate cuts remain. Realtor.com Senior Economist Ralph McLaughlin stated, "Although the monthly Consumer Price Index report reached its lowest level since early 2020, Federal Reserve Chairman Jerome Powell reiterated his commitment to fighting inflation. Any rate cuts later this year might be limited to just one." Even if the Federal Reserve reduces rates, it will take time for mortgage rates to drop to levels that make borrowing more favorable for buyers.

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For the week ending June 8, the total number of active homes for sale increased by 36% year-over-year, marking the 31st consecutive week of surpassing last year's levels. This indicates that the supply of homes is recovering, which is good news for homebuyers. The stabilization of home prices also indicates that the market is gradually balancing supply and demand. Jiayi Xu explained, "Recently, more affordable housing has entered the market, stabilizing the upward trend in home prices." Another factor driving price stabilization is the increase in overall housing inventory, providing more options for buyers.

During the week ending June 8, homes stayed on the market for two more days compared to last year. Since March, the time homes spend on the market has fluctuated within a two-day range of last year's levels. Xu pointed out that high home prices and mortgage rates have slowed down home sales, "making it difficult for the market to rebound under these conditions." Nevertheless, as the inventory of homes for sale returns to pre-pandemic levels, they are still selling faster than before the pandemic.

Xu believes, "Due to recent fluctuations in mortgage rates around 7%, potential sellers are closely monitoring these changes and adjusting their listing decisions accordingly. If the economy continues to show signs of slowing growth and declining inflation, it could lead to softer rates, potentially resulting in more new listings in the coming weeks." She added that while the speed of home sales has slowed, the housing market is expected to remain active, particularly with declining rates and more homes entering the market.

Nationally, the growth in housing inventory has been particularly significant in the southern regions, with inventory levels in May up 47.2% year-over-year. These homes are mostly smaller, budget-friendly properties, meeting the needs of many buyers. As more affordable homes enter the market, buyers have more options, curbing the trend of rising home prices.

Although the Federal Reserve has not immediately cut rates, market expectations for future rate cuts and changes in current economic data have prompted both sellers and buyers to actively adjust their strategies to seize the most favorable market opportunities. Overall, the decline in mortgage rates and the increase in new home listings indicate that despite challenges, the real estate market remains vibrant. Both buyers and sellers are closely monitoring market changes to maximize the benefits of this advantageous opportunity.