3 Early Signs the Housing Market Could Normalize Soon

For the first time in five months, home prices fell. It’s also the first time home prices did not break a record, and other metrics point toward normalization for the housing market. For the four weeks ending August 1, existing home prices dropped by 0.2%, according to data from Redfin. Still, Business Insider says home prices remain 18% higher compared to last year and economists note that prices will continue to rise, just at a slower pace. Inventory also increased slightly in July, up 13% compared to the low in March but still 26% lower than last year.

Redfin's report matches trends in government data. The monthly supply of homes in the US rose to 6.3 months' worth in June, its highest level since April 2020 and nearly above it's pandemic-era peak.

3. Competition is fading away
Sales also aren't closing with the same fervor of a few months ago.

For one, the average home spent 16 days on the market, up from the lows seen earlier in the month. Rapid-fire purchases became the new normal this year as buyers rushed to close deals before getting outbid.

Just under half of homes that went under contract had an accepted offer in two weeks, according to Redfin. That's the first time the share fell below 50% since February.

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