T
he housing market is shifting in favor of buyers, with inventory levels up and existing home sales down. Despite this, mortgage rates remain high, hovering around 6.74% for a 30-year fixed-rate loan. Economists expect rates to drop to around 6.4% by the end of the year if inflation remains subdued.

    Buyers may find more room to negotiate on prices due to slow home sales and persistent concerns about inflation and the job market. Affordability is improving, with the median monthly mortgage payment dropping to $2,679, but this window of opportunity may be short-lived as inventory traditionally shrinks in the second half of the year.

    Inventory levels have reached a decade-high, with 9.8 months' worth of new homes available and 4.7 months' worth of existing homes on the market. New home sales fell 6.6% from last year, while existing home sales dropped 2.7%. Mortgage applications continue to rise, driven by conventional purchase loans.

    Buyers should be cautious not to miss out on negotiating power as listings drop off later in the year. Sellers may be more willing to accept lower offers, especially if they're already under contract or need to move quickly. With mortgage rates expected to drop and affordability improving, now may be a good time for buyers to make their move.