In the past 48 hours, the US housing industry has shown signs of both stabilization and continuing strain, reflecting shifting market dynamics across the country. The national housing market has reached a five-month supply of inventory, marking the first time since 2016 that balance has appeared during the typically active fall season. This shift from a strongly seller-driven market allows buyers more leverage and options. Active listings now exceed 1.1 million, which is more than double the pandemic lows, although the pace of new listings appears to be slowing compared to earlier in the year. Buyers are also gaining time; listings are staying on the market slightly longer than last fall, reducing the pressure to make instant offers. Nationally, nearly 42 percent of sellers are cutting prices, with the median markdown about 4 percent, reflecting increased flexibility among homeowners.
Mortgage rates have dipped below six and a quarter percent, their lowest point in months, which is supporting a modest rebound in buyer demand and improving affordability to levels last seen in early 2023. Home price growth has also begun to firm, with annual appreciation reaching 1.2 percent in September, reversing eight months of slowing gains. Yet, affordability remains a critical concern. The median existing single-family home price climbed to over 427,000 dollars in August, or roughly five times the median household income—a ratio well beyond traditional benchmarks of affordability.
Recent regulatory moves have largely focused on improving transparency in lending and encouraging new supply, but new housing starts and permits are down about 11 percent year over year, limiting how quickly the market can correct its inventory challenges.
Industry leaders and mortgage technology providers are investing in modern digital platforms to speed up processing and better target refinancing as rates fall. At the same time, large players like Zillow are sounding alarms about long-term affordability challenges, especially as property taxes and insurance costs rise.
Regionally, the picture remains diverse. In places like Orange County, inventory fell 4 percent in just two weeks, while demand rose amid slipping rates, signaling local pockets of renewed competition. Compared to last year, the market is more balanced, but persistent affordability barriers and uneven supply chain recovery continue to challenge market entrants. The outlook is a market finding equilibrium but still facing significant obstacles for both buyers and sellers.
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