As active listings increase by 35%, home prices start to decline.

• During the four weeks ending June 23, the average home sold for slightly below its listed price.
• In the last month, less than two thirds of homes sold over asking price, which is the lowest share since June 2020.
• In May, the annual home price growth rate decreased to 4.6% from 5.3% in April, marking the slowest growth in 7 months.

Despite the fact that home prices are still higher than they were a year ago, some of the heat is coming out of them.

New reports indicate that the price gains are decreasing, causing home sellers to become more flexible in the current stagnant spring market.

Since the start of the Covid-19 pandemic, when home sales slowed down, the typical home sold for 0.3% less than its asking price during the four weeks ended June 23, according to Redfin. A year ago at that time, the typical home was selling at list price. Two years ago, it was selling at about 2% above list price.

Despite the housing market not crashing, the share of homes sold over asking price in the last month has decreased to the lowest since June 2020. While most sellers are still listing their homes at higher prices than comparable homes sold for a year ago, some are conceding that they can't command those prices.

For the third consecutive month, the average rate on a 30-year fixed mortgage has remained above 7%, with mortgage rates remaining stubbornly high, according to Mortgage News Daily.

The S&P Case-Shiller index revealed a 6.3% increase in home prices from April 2023 to April 2024. This trend continues in May. Home prices have increased by 47% since early 2020, with the median sale price now five times the median household income.

ICE Mortgage Technology's home price data, which CNBC has obtained exclusively, reveals that annual home price growth decreased to 4.6% in May from 5.3% in April. This represents the slowest growth rate in seven months.

As inventory builds, prices are starting to decrease. Despite a 35% increase in total active listings from last year, inventory remains 30% lower than typical pre-pandemic levels.

"According to Marije Kruythoff, a Los Angeles Redfin agent, some buyers believe they can obtain a deal because they hear the market is cool, while sellers think every home will sell for top dollar regardless of its condition. However, the truth is that the outcome depends on the house and its location."