U.S. median list prices for homes fell 2.4% year over year in May, the steepest drop in Realtor.com's data since 2017. Mortgage interest rates remained above 6% for much of the month.

The average 30-year mortgage interest rate was 6.37% in the week of the report and 6.62% on May 21. Rates had been below 6% on April 21. There are 47% more sellers than buyers in the U.S. housing market.

"From a financing perspective, buyers have an advantage right now as inventory levels are higher, properties are staying on the market longer, and demand is softer due to the high mortgage rates," said Melissa Cohn, regional vice president of William Raveis Mortgage. She added that "some of the concessions are meaningful and have covered almost all closing costs, saving the buyer thousands of dollars."

"When asking prices and price reductions fall together, that tells us sellers have a better handle on the market and what buyers are willing to pay than they did last year," said Jake Krimmel, senior economist at Realtor.com. "Sellers are reading current conditions and setting a realistic number up front, instead of listing high, watching the home sit, and slashing later."

Kate Swensen, a real estate agent with HomeSmart, said buyers are securing properties below asking prices. "Buyers are getting things for under asking prices and are able to get more concessions to help buy down the interest rate, or are using this concession to have a lower dollar amount for closing costs," Swensen said. She noted that during inspections, "if there is a 30-item list, the seller is now completing 80% or more of the list, which is extremely beneficial to the buyer." Swensen added that "the best place for a buyer to have little to no competition is in the condo and townhouse market" because "those tend to sit much longer on the market."

In the Denver metro area, homes priced between $525,000 and $600,000 are experiencing an average price drop of $10,000 before sale. "Many local housing markets are beginning to look healthier when it comes to both activity and affordability," Krimmel said.