Core Insights - The U.S. real estate market is undergoing a structural shift, with supply increasing and demand slowing, leading to a cooling of home prices [1] - The S&P CoreLogic Case-Shiller Home Price Index indicates that as of April, home prices nationwide rose only 2.7% year-over-year, the smallest increase in nearly two years, and down from 3.4% in March [1] - Instantaneous price tracking from Parcl Labs shows that home prices nationwide are nearly flat year-over-year, indicating a trend of price weakness [1] Price Trends - The slowdown in home prices is evident in both the 10-city and 20-city composite indices, which are significantly below recent peaks [1] - The annual increase in home prices for April was primarily driven by the spring selling season over the past six months, rather than balanced growth throughout the year, indicating a concentration of market momentum [1] Mortgage Rates and Buyer Behavior - High mortgage rates continue to deter many potential homebuyers, with the 30-year fixed mortgage rate surpassing 7% in April, although it has slightly retreated, remaining at multi-year highs [1] - First-time homebuyers accounted for only 30% of overall sales in May, significantly below the historical average of 40%, highlighting the severe impact of high mortgage costs on this demographic [1] Supply Dynamics - The number of homes for sale has increased, but overall supply remains below pre-pandemic levels [2] - Approximately 6% of homeowners are at risk of selling at a loss, slightly higher than a year ago but still at a historical low [2] - The downward risk in the housing market is being supported by insufficient supply, as most existing homeowners are reluctant to give up low mortgage rates locked in during the pandemic [2]