Florida, Texas rank best for home buyers in new Zillow index

Inventory and new listings are rising nationwide, while price cuts hit a seasonal high point

• Zillow's new market heat index shows seven of the top 10 markets for buyers are in Florida or Texas.
• Buffalo, the Bay Area and the Northeast rank among the best areas for sellers.
• High rates and more homes are easing competition, but sellers maintain a slight edge nationwide. 

SEATTLE, May 15, 2024 /PRNewswire/ -- Texas and Florida metros dominate the best places for buyers in Zillow's new market heat index, securing seven of the top 10 spots. But most of the country's 50 largest metros — and the U.S. at large — favor sellers, according to the latest market report¹ from Zillow®. 

"Prospective buyers in most markets today are feeling less intense competition than in recent spring shopping seasons. Pressure is easing up as mortgage rates raise costs and sellers return," said Skylar Olsen, Zillow chief economist. "However, the pool of homes for sale remains remarkably low. This means the nation remains a seller's market despite high mortgage rates — homes are selling faster, with more buyer interest over any one listing, than pre-pandemic." 

Strong construction in Texas and Florida has helped restore inventory levels in those states, easing competition. Austin and San Antonio are two of just three markets with more inventory now than before the pandemic, while Tampa, Orlando and Jacksonville have among the smallest deficits.

The top market for sellers is Buffalo, New York, forecast by Zillow in January as the hottest market of 2024. Among the top metros for sellers are more expensive (and inventory-constrained) coastal tech hubs, relatively affordable spillover markets in the Northeast — Hartford and Providence — and hot Upper Midwest metros Milwaukee and Minneapolis. 

Zillow's new market heat index visually represents buyers' urgency or sellers' confidence in an area and shows how that's changed over time. It takes into account the share of homes that sell quickly, the share of homes with a price cut, and buyer engagement with active Zillow listings in a market. 

Springtime competition coasts as costs and inventory rise

Both inventory and new listings posted solid gains monthly and compared to last year. Buyers had a lot more options to choose from, as inventory rose 6.4% from March to April and climbed 18% over last year, the second-largest annual increase since at least 2019. They also had more fresh options, with new listings up nearly 11% month over month and rising almost 16% year over year. Despite April's improvement, total inventory sits 36% below pre-pandemic norms.

Mortgage rates that spiked above 7% for the first time this year, along with these infusions of inventory, held competition steady at a time of year when it normally ramps up.

U.S. home values grew 1.2% from March to April and are 4.4% higher than a year ago. That's a slight slowdown from 4.6% annual growth seen last month. The typical U.S. home is now worth $359,402. 

The share of listings with a price cut reached 22.4% in April, the highest rate for April in the past six years and a significant step up from 17.2% last year. Price cuts can be a sign of weakening demand that foretells softer price growth ahead, or they can be a natural process of feeling the market out as sellers and their agents come up with their pricing strategy. The latter scenario becomes more likely in a rapidly changing market like we see today, with relatively few recent sales to look at as comps. 

Homes that sold in April sold in 13 days, which is fast by historical standards. However, that is three days slower than last April, the first time since June 2023 that the speed of sales fell behind the previous year's pace.

About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences. 

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®. 

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

SOURCE Zillow