Home sales in the US may pick up in the summer after a prolonged period of weakness. While analysts do not expect a new housing boom, several leading indicators indicate that some buyers are starting to return to the market despite still high mortgage rates.
One of the most important signals comes from the mortgage market. In June, the volume of so-called mortgage rate locks - fixing interest rates on mortgage loans, reached its highest level in more than three years. Optimal Blue data shows a growth of 14% on an annual basis and 10% compared to May. This indicator is closely monitored because it often precedes the actual increase in housing transactions in the coming months.
A similar picture is seen in pre-agreed sales. According to Redfin, the number of homes with pre-contracts is also rising, suggesting that some buyers are no longer waiting for a sharp drop in interest rates and prefer to enter the market under current conditions.
The reason is that mortgage rates remain high, but they are no longer at their peak levels. The average mortgage rate is about 6.49%, which is significantly below the almost 8 percent reached in 2023. Since mid-May, rates have been relatively stable, which gives buyers greater predictability when calculating monthly payments.
However, the market remains far from its normal levels of activity. The spring season, which is traditionally the strongest for home sales in the United States, ended disappointingly. Sales of existing homes in June fell 2.4% compared to May and reached an annual rate of 4.09 million transactions. The median home price remained near record levels — $440,600, up 1.8% from a year earlier.
The main problem remains affordability. High prices, expensive mortgages, rising insurance, maintenance and tax costs are limiting the options of many households. For first-time home buyers, the situation is especially difficult, as monthly payments remain significantly higher than during the low interest rate period during the pandemic.
The change comes from the side of attitudes. More and more buyers realize that a return to mortgage rates of 3% in the short term is unlikely. Therefore, some of them are starting to accept the new reality: more expensive financing, but also a slightly larger selection of properties compared to previous years.
Increasing supply is also helping. In some U.S. markets, sellers are now more willing to offer discounts, negotiate, and cover some of the transaction costs. This does not mean a drop in prices everywhere, but it does give more room for negotiation, especially in regions where supply is recovering more quickly.
For sellers, the situation is also changing. After years in which homes sold quickly and with multiple offers, the market is now more balanced. Properties are staying on the market longer, and buyers are being more cautious. This is forcing owners to set more realistic prices and be more flexible in negotiations.
Analysts do not expect a sharp spike in transactions. The more likely scenario is a moderate revival - enough to give brokers, lenders, construction companies and related sectors a breath of air, but not enough to completely change the market picture.
For the real estate sector, this is an important signal. After a long period of waiting, the market may gradually move from a blockage phase to an adaptation phase. Buyers are starting to get used to higher interest rates, sellers — with more realistic expectations, and financial institutions — with more cautious but more stable demand.
The summer may prove to be a test of whether the American housing market is truly starting to emerge from stagnation, or whether the temporary growth in mortgage activity will remain a short episode. So far, the signals are cautiously positive: transactions are not returning to the euphoria of previous years, but interest in purchasing a home no longer seems to be completely frozen.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg