After two years of record-setting activity, there are signs the housing market might be cooling. High home prices and a surge in mortgage interest rates are slowing buyer activity, with home sales declining for the third consecutive month under the weight of soaring homeownership costs. The National Association of REALTORS (NAR) reports existing home sales were down 2.4% from the previous month, while pending sales fell 3.9% as of the last measure, extending the trend of recent months. Economists predict sales will continue to soften in the near future, which may put downward pressure on home prices.

New listings decreased six percent for residential homes and 10.9% for townhouse/condo homes. Pending sales decreased 9.9% for residential homes and 18.3% for townhouse/condo homes. Inventory decreased 18% for residential homes and 34.3% for townhouse/condo homes.

Median sales price increased 3.8% to $275,000 for residential homes and five percent to $210,000 for townhouse/condo homes. Days on market decreased 17.4% for residential homes and 30.6% for townhouse/condo homes. Months supply of inventory decreased 7.7% for residential homes and 33.3% for townhouse/condo homes.

According to NAR, the slowdown in sales has provided a much-needed lift to the housing supply, with inventory up 10.8% from the previous month. However, supply remains down 10.4% compared to this time last year, with only 2.2 months’ supply of homes at the current sales pace. As the nation continues to explore ways to solve the ongoing housing shortage, estimated at 5.5 million homes, the Biden administration recently unveiled the Housing Supply Action Plan, which aims to expand housing access through a number of administrative and legislative actions and help relieve the nation’s housing crisis over the next five years.