Raleigh's real estate market is cooling, slightly

With pending home sales down 6.5% and new listings up 12% year over year, Raleigh's real estate market is showing early signs of slowing down. But home prices are still up 22.5% from May 2021.

Why it matters: We keep hearing about a market crash, but so far, local data doesn't support that claim.

Yes, but: Monthly data show early signs of a cooler market, even if it's slight.

What's happening: From May 2021 to May 2022, new listings were up 12% and pending sales were down 6.5%.

• More buyers are holding off as home ownership becomes too expensive. And sellers rushed to market for fear of missing out on peak home pricing.

This comes after mortgage rates surpassed 5% for the first time in 10 years.

The trend continued in June, with months supply of inventory (a measurement of home supply) increasing to 1.2, up from 0.7 the month prior.

• "While (inventory) is up, it's still very low," Matt Fowler, executive director of the Triangle Multiple Listing Services, told Axios in an email.

Be smart: Inventory is still critically low overall which continues to push home prices up.

• "The rise in rates over such a short period had a measurable impact on effective monthly payments," Fowler said. "Some people who could afford a house at $2,400 per month simply could not at $3,000 per month."
• The Triangle's Affordability Index also hit an all-time low of 67 last month, according to Fowler. That meant the region's median income was just 67% of what is needed to qualify for a median priced home at current interest rates.

What we're watching: New listings and pending sales. If more listings flood the market this summer and buyers don't bite, that’s when we would start to see more power shift into buyers' hands.

Bottom line: We're not seeing major changes in Raleigh just yet, but we're starting to see early signs of a cooling market.