• Asking prices fell 2.5% year over year in June, the eighth straight monthly decline.
  • Pending home sales rose 3.7%, signaling improved buyer demand.
  • Time on market stabilized for the first time in 26 months, indicating a market that is rebalancing rather than crashing.

A Slow Thaw

After more than two years of elevated mortgage rates and sluggish activity, the U.S. housing market is showing subtle but significant signs of rebalancing. According to data from Realtor.com, asking prices fell 2.5% year over year in June, marking the eighth consecutive monthly decline. Meanwhile, pending home sales rose 3.7%, and the median time homes spent on the market held steady from a year ago — the first time that has happened in 26 months.

The data points to a market where buyers, who had been largely sidelined by affordability constraints, are beginning to dip their toes back in. “We’re seeing the early stages of a demand recovery,” said Danielle Hale, chief economist at Realtor.com. “But it’s a fragile one, heavily dependent on mortgage rates staying below 6.5%.”

Price Pain and Gain

The price declines, while modest, mark a departure from the double-digit annual gains seen during the pandemic. They are also unevenly distributed. Regions that saw the biggest run-ups — including parts of the Sun Belt and Mountain West — are experiencing the steepest drops, with some markets seeing declines of 5% or more. In contrast, markets in the Northeast and Midwest, where supply is tighter, are holding up better.

“This isn’t a crash; it’s a reset,” said Mark Fleming, chief economist at title insurer First American. “The market is moving from a period of extreme seller advantage to something more balanced.”

Buyers Return, Cautiously

The uptick in pending sales suggests that lower prices are luring some buyers off the sidelines. But the recovery is far from robust. Mortgage rates, while off their 2025 peaks, remain above 6%, keeping monthly payments high. Many would-be buyers are still priced out, particularly first-timers who rely on larger loans.

“People are adjusting their expectations,” said real estate agent Jessica Lautz of the National Association of Realtors. “They’re buying smaller homes, or moving to cheaper suburbs. But they are buying.”

The steadier time-on-market metric is particularly telling. For the first time in 26 months, the typical listing didn’t linger longer than a year ago, suggesting that homes priced correctly are finding buyers without needing deep discounts.

Outlook

Analysts caution that the road to a full recovery will be long and uneven. Inventories, while growing, are still below pre-pandemic levels. And any sharp uptick in rates could quickly reverse the nascent demand. Still, the direction is clear: the U.S. housing market is slowly tilting back toward balance.

Correction: An earlier version of this article misstated the year-over-year percentage change for pending home sales. It rose 3.7%, not 4.2%.