Both home price increases and the reduction in the houses for sale inventory slowed in June, a good sign for purchase activity picking up in the second half of the year, according to Redfin.
Home prices were up 5.7% on a year-over-year basis in June, the smallest annual increase since December 2016. The national median price was $312,170, Redfin said.
At the same time, for-sale inventory fell by 6% year-over-year, which continues a gradual easing that started in January.
But on a month-to-month basis, the inventory rose 1.6% from May to 742,500 properties for sale.
If mortgage interest rates remained flat, home price appreciation slowed and the inventory increased, it could boost the housing market out of the doldrums of the first half of this year as homes become more affordable for consumers, Freddie Mac Chief Economist Sam Khater previously said in his latest forecast.
In a trio of the nation's hottest housing markets, the for sale inventory rose while home sales fell, a sign that the affordability crisis is crimping activity in those cities, said Redfin CEO Glenn Kelman in a press release.
In Portland, Ore., the inventory was up 31.6% while sales were down 9.6%. The inventory rose 11.9% in San Jose, Calif., but sales fell 16.3%. And in Seattle, the inventory was up 24.2%, but sales were down 10.1%.
"After 75 straight months of price increases in these markets that far outpaced wage growth, homebuyers are now becoming selective about which homes to buy, and at what price," said Kelman. "The homes that did sell in June still sold quickly, but buyers were significantly more likely to reject homes that were less desirable or aggressively priced by the seller."
Part of the lull in activity might be seasonally buyer fatigue. However, "it'll be interesting to see whether buyers adjust to the latest price increase and come back in force this fall, or if instead we see these markets shift more in favor of buyers," he continued.
San Jose did lead the nation in annual price growth percentage, up 22.4% from June 2017. Seattle was fifth at 11.4%.
Nationwide, home sales fell 3.3% from the previous year, but there was a caveat. There were five Thursdays in June 2017 and because Thursday is a common day for home purchases to close, it skews the comparison, Redfin said. When the comparison is made with four Thursdays in June 2017, home sales were up 1.2% in June 2018.
The pace of home sales was at 34 days from listing to contract, unchanged from May's record pace and three days faster than last year.