You know, I'm watching the national pending home sales data pretty carefully these days, and according to Realtor.com Research, we saw a pullback in June as the spring market cooled heading into summer. Contract signings dropped 5.4% for the month, and year over year they were down a small amount too. Mortgage rates were sitting right around that 6.5% mark through the month, which is still putting some friction on the market even though rates did come down a bit as some of the Middle East tensions eased up.
What's interesting to me is that even with these headwinds, rates are actually lower than they were a year ago, so buyers still have some advantage in terms of their financing costs. At the same time, we're seeing inventory continue to build up across the country, which is definitely shifting this market more in the buyer's favor overall.
Looking at the broader picture for the rest of the year, Realtor.com put out updated forecasts and they've revised their expectations down across the board. They're still projecting the market will show year-over-year growth, but the first half has been more modest than they originally thought. The good news on the affordability front is that typical monthly payments are running about 1.9% lower than they were last year, which matters to families trying to make their housing budget work.
The national story shows that every region saw contract signings pull back in June, with the Midwest taking the biggest hit. Looking at year-over-year trends, the Northeast came out ahead, but the West and South both showed declines when compared to a year ago. Some interesting winners are popping up though, with Sacramento and Virginia Beach leading the pack in growth, and Austin is making waves too as inventory builds and prices soften there.
Summer is shaping up to be steadily positive but quieter than what we'd normally expect before everything shut down for the pandemic, and there's some hope that softer inflation numbers might give us lower rates going forward.
What I'm seeing locally here in the Bay Area and Fremont is that this national shift toward more inventory and buyer favorability is definitely reaching our region, though our market has its own dynamics. The East Bay in particular is starting to feel the effects of more choice coming to the market, and that's changing how I counsel both my sellers and buyers right now. It's becoming more of a balanced market rather than the seller's advantage we've had, and that's important context for anyone making moves in the next few months.
