I want to walk you through what Zillow Research is seeing in the national housing market right now, because there are some encouraging signs mixed in with the ongoing challenges we're all navigating. According to their June report, home sales picked up notably compared to May, jumping almost six percent above where they were a year ago. That's the kind of momentum that tells me people are feeling a bit more confidence about making moves in this market.
One of the big drivers here is mortgage affordability. According to Freddie Mac data that Zillow cited, mortgage rates have dropped more than twenty basis points compared to last year, which translates to real savings for buyers. The typical mortgage payment is running about two and a half percent cheaper than it was a year ago when you factor in just the rate and principal, and that matters because homes are only appreciating at a modest pace right now, up just over one percent year over year.
Now here's where it gets interesting for folks trying to find inventory. New listings rose three percent year over year in June, which is a turnaround from May's weakness. But I want to be honest with you, the overall inventory gains are slowing down significantly. Total inventory only grew less than one percent compared to last year, the smallest increase since late 2023. So we're still in a tight market, even if things are thawing a bit.
What really caught my attention in Zillow's analysis is how differently the market is behaving at different price points. The most affordable homes, the bottom five percent by value, are finally seeing the fastest growth in pending sales since 2022. At the same time, inventory is growing fastest at that price tier too, which is actually creating some much-needed breathing room. More properties in that segment are selling below asking price than before, which means real pressure downward on those lower-priced homes.
What I am seeing locally in the Bay Area and East Bay is that this national pattern of modest recovery combined with tight inventory continues to shape what my buyers and sellers are experiencing. The slight improvement in affordability is genuinely helpful for first-time buyers and those priced out of our market, but the fact that inventory gains remain so small reminds me we're still dealing with fundamental scarcity here. For sellers, especially those with more modestly priced properties, this could present an opportunity as the market slowly finds more balance.
