A buyer's market is indicated by the decrease in June home sales and the increase in supply.

• Sales of previously owned homes dropped 5.4% in June compared with May.
• The number of units in inventory increased by 23.4% from the previous year, reaching 1.32 million units in June, despite being up from record lows, but still leaving a 4.1-month supply.
• In June, the median price of an existing home sold was $426,900, representing a 4.1% yearly increase.

The National Association of Realtors reported that sales of previously owned homes decreased by 5.4% in June compared to May, reaching 3.89 million units on a seasonally adjusted, annualized basis. Additionally, sales were 5.4% lower than in June of the previous year, making it the slowest sales pace since December.

Based on contracts signed in April and May, the average rate on the 30-year fixed mortgage increased above 7%. However, rates have since decreased slightly to the high 6% range.

"Lawrence Yun, the chief economist for the Realtors, stated that there is a gradual transition from a seller's market to a buyer's market. Homes are taking longer to sell, and sellers are receiving fewer bids. Buyers are increasingly demanding home inspections and appraisals, and the national inventory is steadily increasing."

The inventory of units at the end of June increased by 23.4% from the previous year, reaching 1.32 million units. Despite this, the supply remains at a 4.1-month level, which is still below the 6-month balance point between buyers and sellers.

Since May 2020, the highest inventory levels have been observed, thanks to homes remaining on the market for longer periods. The average time a home stayed on the market increased to 22 days from 18 days the previous year.

Despite the new supply, the median price of an existing home sold in June increased by 4.1% year over year and reached an all-time high for the second straight month. This is due to the stronger performance of the higher end of the market.

While sales of homes priced over $1 million increased last year, there was a significant decline in sales for homes priced between $250,000 and below.

The supply of homes for sale is lowest on the lower end, but is experiencing a new increase. Although the national sales price is high, new listing prices are lower.

An increase in smaller and lower-priced listings is keeping the median listing price from rising, according to Danielle Hale, chief economist for Realtor.com. Specifically, the number of for-sale homes in the $200k to $350k price range has jumped by 50% compared to the previous year.

All-cash sales among higher-end buyers increased by 2%, while investors' share of sales decreased by 2% from the previous year.

If inventory continues to increase, either home sales will rise or prices will decrease, according to Yun.