After two years of record-setting activity, there are signs the housing market might be cooling. High home prices and a surge in mortgage interest rates are slowing buyer activity, with home sales declining for the third consecutive month under the weight of soaring homeownership costs. The National Association of REALTORS® (NAR) reports existing home sales were down 2.4% from the previous month, while pending sales fell 3.9% as of last measure, extending the trend of recent months. Economists predict sales will continue to soften in the near future, which may put downward pressure on home prices.

New Listings decreased 6.7 percent for single-family homes but increased 17.9 percent for townhouse-condo properties. Pending Sales remained flat for single-family properties but increased 20.8 percent for townhouse-condo properties. Inventory decreased 35.8 percent for single-family homes and 28.3 percent for townhouse-condo properties. The Median Sales Price was up 15.8 percent to $439,950 for single-family homes and 26.7 percent to $332,500 for townhouse-condo properties. Days on Market decreased 29.0 percent for single-family homes and 50.0 percent for townhouse-condo properties. Months Supply of Inventory decreased 28.6 percent for single-family homes and 25.0 percent for townhouse-condo properties.

The slowdown in sales has provided a much-needed lift to housing supply, with inventory up 10.8% from the previous month according to NAR, although supply remains down 10.4% compared to this time last year, with only 2.2 months’ supply of homes at the current sales pace. As the nation continues to explore ways to solve the ongoing housing shortage, estimated at 5.5 million homes, the Biden administration recently unveiled the Housing Supply Action Plan, which aims to expand housing access through a number of administrative and legislative actions and help relieve the nation’s housing crisis over the next 5 years.