Real estate experts agree: house prices are falling | “Sellers are pricing to sell rather than pricing to test the market”

For the past few years, buying a house has often felt like an uphill battle. Homes attracted multiple offers, prices kept rising, and sellers seemed convinced that someone would always be willing to pay more.

That’s why a new housing report from Realtor.com is getting attention.

According to data reported by Realtor.com journalist Snejana Farberov, the national median listing price fell in May, marking the seventh straight month of annual declines and the largest drop recorded in the company’s data since 2017.

Before anyone starts predicting a housing crash, economists say that’s not what the numbers are showing.

Instead, sellers appear to be adjusting to a market where buyers have become far more price-conscious.

A reality check for sellers

During the pandemic housing boom, homeowners could often put ambitious price tags on properties and wait to see what happened.

Today, that strategy is becoming less common.

"Sellers are pricing to sell rather than pricing to test the market," Realtor.com senior economist Jake Krimmel said.

In practical terms, that means more sellers are listing homes closer to what buyers are actually willing and able to pay, instead of starting high and cutting prices later.

Victor Currie of Douglas Elliman Real Estate told Realtor.com that accurate pricing has become more important than ever.

"If a home is priced well for the market, it will sell. If it’s overpriced, it’s likely to sit," he said.

House buyers are still showing up

What’s interesting is that demand hasn’t disappeared.

Mortgage rates remain elevated, and economic uncertainty continues to make buyers cautious. But people are still making offers when homes are priced within their budgets. That’s helping explain why falling prices and rising sales activity can happen at the same time.

Many buyers haven’t stopped wanting homes. They’ve simply become more selective about what they’re willing to pay.

What happens next in the housing market?

The coming months could be important for the housing market.

More homeowners are beginning to list properties after years of holding on to low mortgage rates secured during the pandemic. If inventory continues to grow, buyers could gain even more options and negotiating power.

No one is suggesting homes are suddenly becoming cheap. Affordability remains a challenge across much of the country. But after years of sellers holding most of the cards, the balance appears to be shifting.

For buyers who have spent years waiting for a break, that may be the most encouraging housing news they’ve heard in a while.

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