Nearly 1 in 4 sellers cut home prices as inventory grows
PRNewswire 16-Jul-2024 8:00 AM
Competition is fading fast after the peak of this year's affordability-challenged home shopping season
- Monthly home value growth, while still positive, hit a 14-year low for June as competition relaxes.
- Inventory rose in all but five major metros while the nationwide deficit continues to shrink.
- Affordability challenges persist — new mortgages are affordable in just 11 of 50 major markets.
SEATTLE, July 16, 2024 /PRNewswire/ -- Home listings are piling up as buyers step back from the peak of home shopping season faster than normal, according to the latest monthly report1 from Zillow®.
"A growing segment of homes that aren't competitively priced or well marketed are lingering on the market. Sellers are increasingly cutting prices to entice buyers struggling with affordability," said Skylar Olsen, chief economist of Zillow. "For years, the housing market has been defined by fast sales and few options. Now it's starting to look more like it did before the pandemic in terms of competition, if not costs. As the wait for mortgage rate relief drags on, slower price growth and even dips in some areas will help buyers catch up on saving for a down payment."
Inventory slowly recovers
The total number of homes on the market has risen throughout the year, ticking up 4% from May to June to stand nearly 23% above last year's low level. While inventory levels are still about 33% below pre-pandemic averages, that's the smallest deficit since the fall of 2020, when the pool of available homes was quickly dropping.
Inventory is higher than last year in all of the 50 largest U.S. metropolitan areas except two — New York and Cleveland — and rose month over month in all but five.
Attractive listings are selling relatively quickly. But buyers still in the market are enjoying a few more days to weigh their choices than they had last summer. Homes sold in June were typically on the market for 15 days before the seller accepted an offer. That's five days shorter than pre-pandemic norms, the smallest difference since June 2020.
High costs weigh on buyers
While mortgage rates have eased from May peaks, buyers are still contending with costs that have risen far faster than wages. A median-income household can afford mortgage payments when buying a typical home in just 11 of 50 major markets, even when putting 20% down.
With many buyers pushed to the sidelines by costs, Zillow's Sales Nowcast in June took a 9% step down from May; sales are 35% lower than pre-pandemic norms.
Slowing appreciation could give buyers a break
Home value growth has slowed as inventory rises. Annual appreciation is a reasonable 3.2% nationally, down from a 2024 peak of 4.6% in March. Monthly growth has decelerated to 0.6% — the slowest June appreciation since 2011.
Slower home value growth in the months ahead could give struggling buyers a chance to make up ground. Zillow forecasts home values to rise just 1% nationally through June 2025.
Cooling competition brings price cuts
While sellers still have a slight edge nationally, Zillow's market heat index shows a balanced market may be just over the horizon. Competition is easing fastest in the South; all major Southern markets are either neutral or buyer-friendly, with the exception of Dallas and Raleigh.
Sellers are cutting prices more often to entice buyers. Nearly one-quarter of listings (24.5%) received a price cut in June, the highest rate for this time of year in Zillow records dating back to 2018.
It can be tricky to keep up with rapidly changing list prices and mortgage rates. Zillow's new BuyAbility tool uses up-to-date mortgage rates to show home shoppers price ranges and monthly payments they personally could afford, and whether they're likely to be approved for a loan. Shoppers can make sure all their results on Zillow stay within a set monthly budget by using the search by monthly cost filter.
Metropolitan
Area*
| June Zillow
Home Value
Index (ZHVI)
(Raw)
| ZHVI
Change,
Month
over
month
(MoM)
| ZHVI
Change
Since
Before the
Pandemic
| Market
Favors**
| Share of
Listings
with a
Price
Cut
| Inventory
Change,
YoY
| New
Listings
Change,
YoY
|
United States
| $362,482
| 0.6 %
| 46.1 %
| Seller's
market
| 24.5 %
| 22.7 %
| -25.6 %
|
New York, NY
| $668,930
| 1.0 %
| 32.9 %
| Strong
seller's
market
| 14.2 %
| -2.6 %
| -39.0 %
|
Los Angeles,
CA
| $967,454
| 0.5 %
| 43.5 %
| Strong
seller's
market
| 18.5 %
| 26.1 %
| -26.2 %
|
Chicago, IL
| $326,426
| 1.1 %
| 37.2 %
| Seller's
market
| 22.2 %
| 3.0 %
| -31.7 %
|
Dallas, TX
| $379,707
| 0.2 %
| 47.1 %
| Seller's
market
| 35.2 %
| 34.7 %
| -17.3 %
|
Houston, TX
| $310,820
| 0.3 %
| 39.0 %
| Neutral
market
| 30.2 %
| 26.4 %
| -11.7 %
|
Washington,
DC
| $568,789
| 0.3 %
| 31.1 %
| Strong
seller's
market
| 21.1 %
| 15.5 %
| -27.4 %
|
Philadelphia,
PA
| $365,138
| 0.8 %
| 44.9 %
| Seller's
market
| 20.9 %
| 7.3 %
| -28.8 %
|
Miami, FL
| $489,548
| 0.1 %
| 62.2 %
| Buyer's
market
| 22.7 %
| 47.9 %
| -10.7 %
|
Atlanta, GA
| $387,447
| 0.3 %
| 56.9 %
| Neutral
market
| 29.5 %
| 38.4 %
| -23.4 %
|
Boston, MA
| $704,875
| 0.8 %
| 43.7 %
| Strong
seller's
market
| 18.9 %
| 17.4 %
| -30.7 %
|
Phoenix, AZ
| $459,469
| -0.1 %
| 52.9 %
| Neutral
market
| 33.8 %
| 17.7 %
| -28.5 %
|
San
Francisco, CA
| $1,179,789
| 0.1 %
| 25.6 %
| Strong
seller's
market
| 19.0 %
| 30.0 %
| -20.9 %
|
Riverside, CA
| $586,749
| 0.5 %
| 52.8 %
| Seller's
market
| 22.5 %
| 27.7 %
| -30.6 %
|
Detroit, MI
| $256,487
| 1.0 %
| 41.8 %
| Seller's
market
| 21.0 %
| 11.5 %
| -30.4 %
|
Seattle, WA
| $747,807
| 0.2 %
| 45.1 %
| Seller's
market
| 25.2 %
| 30.4 %
| -27.8 %
|
Minneapolis,
MN
| $377,468
| 0.5 %
| 28.0 %
| Strong
seller's
market
| 22.7 %
| 12.8 %
| -34.4 %
|
San Diego, CA
| $958,213
| 0.2 %
| 57.1 %
| Seller's
market
| 24.5 %
| 41.6 %
| -29.6 %
|
Tampa, FL
| $379,857
| -0.1 %
| 61.7 %
| Buyer's
market
| 34.7 %
| 71.1 %
| -13.5 %
|
Denver, CO
| $590,876
| 0.0 %
| 36.1 %
| Seller's
market
| 34.8 %
| 30.1 %
| -22.3 %
|
Baltimore,
MD
| $386,992
| 0.3 %
| 31.7 %
| Seller's
market
| 23.1 %
| 14.4 %
| -27.0 %
|
St. Louis, MO
| $256,126
| 1.0 %
| 41.6 %
| Strong
seller's
market
| 20.6 %
| 14.5 %
| -27.1 %
|
Orlando, FL
| $397,633
| 0.1 %
| 54.7 %
| Neutral
market
| 29.4 %
| 59.8 %
| -13.3 %
|
Charlotte, NC
| $385,721
| 0.3 %
| 59.7 %
| Neutral
market
| 24.8 %
| 34.3 %
| -18.2 %
|
San Antonio,
TX
| $289,118
| 0.1 %
| 34.9 %
| Neutral
market
| 31.7 %
| 28.0 %
| -10.1 %
|
Portland, OR
| $552,994
| 0.2 %
| 32.7 %
| Seller's
market
| 26.7 %
| 19.0 %
| -31.2 %
|
Sacramento,
CA
| $584,433
| 0.2 %
| 34.8 %
| Seller's
market
| 26.5 %
| 19.9 %
| -34.8 %
|
Pittsburgh,
PA
| $219,632
| 1.4 %
| 35.2 %
| Seller's
market
| 25.5 %
| 8.4 %
| -25.8 %
|
Cincinnati,
OH
| $289,710
| 1.0 %
| 49.0 %
| Seller's
market
| 24.6 %
| 12.6 %
| -23.2 %
|
Austin, TX
| $462,322
| -0.1 %
| 42.2 %
| Buyer's
market
| 31.5 %
| 14.5 %
| -9.7 %
|
Las Vegas, NV
| $431,543
| 0.6 %
| 45.3 %
| Seller's
market
| 24.6 %
| 9.5 %
| -31.6 %
|
Kansas City,
MO
| $307,949
| 0.7 %
| 46.9 %
| Seller's
market
| 26.3 %
| 21.1 %
| -34.6 %
|
Columbus,
OH
| $315,991
| 0.7 %
| 50.8 %
| Seller's
market
| 27.1 %
| 19.5 %
| -22.8 %
|
Indianapolis,
IN
| $283,781
| 0.7 %
| 51.8 %
| Seller's
market
| 30.3 %
| 14.2 %
| -23.3 %
|
Cleveland,
OH
| $234,568
| 1.6 %
| 48.7 %
| Strong
seller's
market
| 20.2 %
| -0.2 %
| -28.6 %
|
San Jose, CA
| $1,637,133
| 0.6 %
| 42.6 %
| Strong
seller's
market
| 15.7 %
| 39.0 %
| -15.8 %
|
Nashville, TN
| $446,045
| 0.3 %
| 49.2 %
| Neutral
market
| 33.6 %
| 23.2 %
| -12.3 %
|
Virginia
Beach, VA
| $353,608
| 0.6 %
| 41.9 %
| Seller's
market
| 20.7 %
| 18.8 %
| -29.2 %
|
Providence,
RI
| $489,547
| 1.3 %
| 53.6 %
| Strong
seller's
market
| 17.3 %
| 18.1 %
| -39.8 %
|
Jacksonville,
FL
| $359,737
| 0.1 %
| 52.5 %
| Buyer's
market
| 31.9 %
| 48.4 %
| -9.6 %
|
Milwaukee,
WI
| $352,404
| 1.3 %
| 44.2 %
| Strong
seller's
market
| 12.9 %
| 6.3 %
| -14.6 %
|
Oklahoma
City, OK
| $237,630
| 0.5 %
| 43.5 %
| Neutral
market
| 30.1 %
| 21.9 %
| -12.1 %
|
Raleigh, NC
| $447,639
| 0.3 %
| 53.8 %
| Seller's
market
| 32.1 %
| 32.2 %
| -22.0 %
|
Memphis, TN
| $242,694
| 0.4 %
| 47.1 %
| Buyer's
market
| 26.7 %
| 29.2 %
| -7.1 %
|
Richmond,
VA
| $373,230
| 0.7 %
| 48.0 %
| Strong
seller's
market
| 20.9 %
| 20.4 %
| -29.5 %
|
Louisville, KY
| $260,342
| 0.7 %
| 38.0 %
| Seller's
market
| 25.3 %
| 23.5 %
| -22.5 %
|
New Orleans,
LA
| $241,528
| 0.0 %
| 4.9 %
| Buyer's
market
| 26.9 %
| 5.1 %
| -2.9 %
|
Salt Lake City,
UT
| $547,688
| 0.2 %
| 46.6 %
| Seller's
market
| 34.2 %
| 14.8 %
| -32.0 %
|
Hartford, CT
| $365,954
| 1.3 %
| 58.2 %
| Strong
seller's
market
| 14.7 %
| 5.3 %
| -41.1 %
|
Buffalo, NY
| $267,005
| 1.6 %
| 53.8 %
| Strong
seller's
market
| 16.6 %
| 5.2 %
| -22.2 %
|
Birmingham,
AL
| $254,286
| 0.3 %
| 38.0 %
| Neutral
market
| 23.9 %
| 16.7 %
| -21.9 %
|
*Table ordered by market size
|
**According to Zillow's market heat index
|
|
1 The Zillow® Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research.
|
About Zillow Group
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