Q2 Real Estate
Market Research

Sellers moved before mortgage rates did

The national median listing price fell to $430,000 in June, down 2.5% from a year earlier. Median price per square foot declined 2.1%, while asking prices fell in 33 of the 50 largest metros.

Closed-home prices remained firmer. May’s median existing-home sales price rose 1.3% annually, suggesting sellers adjusted their expectations before the national closed-price median turned negative.

The US housing market split further by region

Inventory in the South and West moved above pre-pandemic levels, while the Northeast and Midwest remained deeply supply-constrained. Price movement followed a similar divide.

The South and West may offer greater negotiating room, but higher inventory can reflect healthy normalization, heavy construction, slower rent growth, or higher ownership costs. The Northeast and Midwest remain firmer, though well-priced properties can still draw competition.

Our experience: metro data is useful for screening, but the investment decision belongs at the neighborhood and property level, where rent comparables, taxes, insurance, and nearby supply determine the result.

Buyers began treating above-6% rates as the current market

Existing-home sales rose 3.2% in May, while pending sales increased 4.8% from a year earlier. The improvement arrived with the average 30-year fixed mortgage rate still at 6.49%.

Part of the buyer pool has stopped waiting for a return to 5% rates. Buyers are adapting through lower prices, larger down payments, seller concessions, builder incentives, and stronger property selection.

Rental income became less forgiving

The typical US asking rent rose 2% annually in May, but 39.6% of rental listings offered a concession. An advertised $2,000 rent with one month free produces an effective first-year monthly rent of about $1,833.

Investors should base rent assumptions on recent comparable leases, current concessions, vacancy, and nearby apartment completions rather than a single national rent-growth figure.

Builders entered H2 with more inventory to move

New single-family home sales fell to an annualized rate of 580,000 in May, down 7.3% from April and 6.8% from a year earlier. Available supply reached 10.3 months.

Builders carrying completed homes may respond with closing-cost assistance, rate buydowns, upgrades, lot-premium reductions, or selected price cuts. The incentive must still be compared with the property’s achievable rent and recurring costs.

For investors, the comparison is simple: measure the economic value of a builder incentive against achievable rent, recurring expenses, and the volume of competing homes entering the same submarket.

Financing strategy became part of property selection

Q2’s lower asking prices may create opportunities for renovation, rental, and refinance strategies. The permanent financing should be considered before the acquisition, not after the work is complete.

Insurance can erase part of the purchase discount

Florida illustrates why acquisition price and ownership cost must be reviewed together. Roof age, construction type, flood zone, storm exposure, wind mitigation, and available carriers can produce very different premiums even within one metro.