Home builders facing more competition from existing homeowners selling: Zillow's Orphe Divounguy

Housing Market Trends - New home sales experienced a nearly 14% month-over-month decline in May, marking the biggest drop in three years [1] - Existing home sales managed a slight increase in May despite headwinds [5] - Resale inventory is up 20% compared to last year [5] Affordability and Demand - Housing affordability has improved slightly from a year ago, but home sales continue to "bounce along the bottom" [3] - Consumer confidence dropped drastically in April, impacting housing demand [4] - A frozen labor market and a potentially rising unemployment rate pose headwinds for housing demand [4][6] Seller and Buyer Dynamics - The market is rebalancing, with bargaining power shifting towards buyers [10] - There were the most price cuts for any May since 2018, indicating sellers and buyers are coming back together [9] - Sellers are facing more competition and need to be more strategic [10] Economic Factors - The labor market is a key factor to watch, potentially more important than higher interest rates [6] - Inflation is roughly 21%, as measured by PCE [7] - The impact of tariffs is already playing itself out [8] Future Outlook - Zillow's forecasting team believes home sales could increase slightly and finish the year slightly higher than in 2024 [12]