Clouds begin to part for buyers as mortgage rates hold steady 

There are some indications that the real estate market is becoming more hospitable for buyers, but it remains to be seen whether these shifts will motivate them to take action this summer.

Mortgage rates are slowly dropping, inflation data was softer than expected in May and housing inventory growth in many markets is providing buyers with some negotiating power. 

After a slow spring, the summer housing market could bring a burst of activity, suggested Hannah Jones, senior economic research analyst at Realtor.com. "Affordability remains a challenge for the typical buyer, but with more price cuts, easing market pace, and ample home supply, prospective buyers have a better chance of finding what they're looking for," Jones said.

Mortgage rates begin to level off

The 30-year fixed-rate mortgage averaged 6.84% this week, according to Freddie Mac. That's down a tick from last week's 6.85% average and only slightly below the 6.95% average a year ago. Mortgage News Daily, which uses a different set of criteria from Freddie Mac to determine the daily rate, pegged the 30-year rate at 6.85% on June 12, down from 6.91% on June 9.

Though the latest data indicates mortgage rates are evening out, an uptick in market activity this summer is far from assured. So far this year, the Federal Reserve has left interest rates unchanged — and since the Fed is not expected to cut rates at next week's meeting, Bright MLS Chief Economist Lisa Sturtevant anticipates the market's slow pace will continue this summer.

However, Sturtevant does think mortgage rates will decline more significantly at the end of the season ahead of the Fed's September meeting. "Lower rates could bring more buyers out this fall. But it is becoming more of a possibility that weakening consumer confidence and labor market concerns may cast a long shadow into the fall housing market," Sturtevant said.

Mortgage applications jump

For the week ending on June 6, mortgage applications increased 12.5% over the week prior, according to the Mortgage Bankers Association, while purchase applications were up 10%. Year-over-year, purchase applications are up 20%.

"Despite ongoing uncertainty surrounding the economy, homebuyers seem to be taking advantage of loosening housing inventory in certain markets," said Joel Kan, MBA's vice president and deputy chief economist.

Sellers struggle to find the right listing price

The steady rise in inventory is making it tough for sellers to determine a listing price. 

In Redfin's weekly report, the gap between the median listing and sale prices has continued to widen. According to data collected over the four weeks ending on June 8, the median home sale price was $397,000, or 7% below the median list price of $425,950. The rolling four-week report estimates that slightly more than 28% of homes sold above the asking price — the lowest level for this time of year since 2020.

"It's still tough for many Americans to buy a home, as affordability remains a real challenge, but house hunters should know that sellers are accepting offers below asking price and giving concessions to get deals done," said Chen Zhao, Redfin's head of economics research. "Buyers should negotiate, and be prepared to move on to other homes if a seller is unwilling to meet them halfway; they may be able to get a better deal elsewhere."

Economic picture remains cloudy

Economic uncertainty is still a wildcard for the summer real estate market. While the softer than expected Consumer Price Index report released on June 11 provided some good news, it's unclear whether tariffs are impacting prices yet. The May report showed CPI rising 0.1%, an increase mainly driven by shelter, which jumped 0.3%.

"While this report reflected consumer prices after Liberation Day, it showed little sign of tariff impact as most reciprocal tariffs were paused for 90 days and many businesses had frontloaded imports ahead of tariffs," noted Fan-Yu Kuo, a senior economist at the National Association of Home Builders.