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During the four weeks ending July 10, the median sale price for U.S. homes fell 0.7% from a record high in June, indicating that as buyers reach their limits on inflation, the housing market is responding. The share of homes with price drops also reached a new high after sellers’ asking prices came down 3% from their May peak, and housing inventory posted its first year-over-year increase since August 2019 during the same time frame, Redfin reports.

As pending home sales continue to taper off amid rising mortgage rates, experts anticipate more price declines and less competition in the coming months, but it could still take some time for prospective buyers to feel the effects of recent market changes.

“Inflation and high mortgage rates are taking a bite out of homebuyer budgets,” said Redfin chief economist Daryl Fairweather. “Few people are able to afford homes costing 50% more than just two years ago in some areas, so homes are beginning to pile up on the market. As a result, prices are starting to come down from their all-time highs. We expect this environment of reduced competition and declining home prices to continue for at least the next several months.”

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