Homebuying conditions continued to broadly soften in favor of buyers in June, as affordability pressures undercut price gains amid regional supply imbalances and elevated mortgage rates.

Following a 2.4% yearly decline in May, asking prices on new listings were 2.5% lower last month than a year ago, according to Realtor.com’s monthly housing report for June, published Wednesday.

June’s median list price of $430,000 marks a 0.1% increase from May and remains more than 34% higher than median asking prices in June 2019. But buyers and sellers went under contract in June at a pace faster than a year ago for the seventh consecutive month, while listings’ median days on the market declined on an annual basis for first time in more than two years, the real estate listings company reported.

“Sellers are reading market conditions and are pricing accordingly from the start rather than listing high and cutting later, and buyers are taking note and making bids,” Danielle Hale, chief economist at Realtor.com, commented in the analysis. “This is a welcome sign that we are in a functioning market.”

Following what the June summary said was an expected seasonal pattern “as spring listings age into summer,” the percentage of listings with price reductions increased to 18.8% from 17.5% in May.

While active listings rose 4.1% over the month, new listings were down 2.4% amid reports that sellers have pulled back amid slow buyer demand.

New listings were only 2.4% higher than a year ago in June, as overall active inventory remained 9.6% below June 2019 levels. New listings were 16.7% below that pre-pandemic threshold last month.

Pandemic-era disruptions linger

Billions of dollars of fiscal stimulus funds flowed into the economy beginning in 2020 in response to the COVID-19 pandemic. Coupled with heavily subsidized mortgage rates from interventionist Federal Reserve monetary policy and roughly $1.3 trillion in mortgage-backed securities purchased by the central bank over a two-year span, it enabled home prices to skyrocket as historic demand hit a longstanding supply crunch.

Millions of U.S. homeowners still sit on ultra-low pandemic-era mortgage rates ranging 2% to 4% below current levels for typical 30-year home loans. Those so-called mortgage rate lock-in effects have improved cash flow for some households while amplifying pricing disparities in supply-constrained markets.

As existing-home values remain historically high and new-home sales have plunged, regional differences are ultimately defining the home sales market in 2026, beyond heavy economic shocks introduced by the start of the Iran war in late February.

That regionalization has played a key role in understanding where some buyers may be experiencing a cheer-worthy rise in available homes to buy and rising negotiating power — and where other prospective homebuyers across the country largely aren’t.

Median list prices fell 4% in the West, 2.5% in the South and 1% in the Northeast from May levels, while the Midwest was unchanged, Realtor.com reported.

But after reaching an all-time national median list price peak of $449,000 exactly four years ago in June 2022, asking prices nationally are down 4.2%. Across the 50 largest U.S. metros, prices are down in 28 and higher in 22.

Outsized declines have been observed across the West region, where median list prices are down 7.3% since that June 2022 peak, and the South, where prices have fallen 3.5%. But over that same time frame, list prices have increased by 10% in the Midwest and 12.6% in the Northeast.

Boasting the largest populations and housing stocks across the U.S., California, Texas and Florida typically account for about one-third of annual home sales, underscoring how regional imbalances are garbling national indexes.

“The two Americas story in housing is now four years in the making,” noted Jake Krimmel, senior economist at Realtor.com, in a press release accompanying the report he authored. “The national number hides two opposing trends under the surface.”

He added that he will be watching for whether days on market lengthen, price cuts accelerate or new listings activity tightens further.

“So far, the leading indicators are holding, so we do not expect the market to stall out like it did last summer,” Krimmel observed.