Homeowners list while buyers hang back, pushing inventory higher

News provided by

Jun 12, 2024, 08:00 ET

Home value growth eases along with competition – price relief may be on the horizon

Homeowners are breaking free from rate lock — new listings rose nearly 13% since last year.
Inventory is accumulating, rising 22% over last year and reducing the pandemic-era deficit.
Home value appreciation slowed in May, and forecast points to prices easing over the next year.

SEATTLE, June 12, 2024 /PRNewswire/ -- Home sellers are returning to the market, but they're finding buyers hesitating, according to the latest Zillow® market report.¹ New listings of houses outpaced sales in May, allowing buyer competition and price growth to cool — and further price relief is in the forecast.

Zillow logo (PRNewsfoto/Zillow Group)

"Rate lock's hold seems to be loosening — homeowners who may have put off listing their homes are done waiting. But just as more choices sprang up for sale, buyers turned on cruise control," said Orphe Divounguy, Zillow senior economist. "Inflation has hit younger households hardest, and stubbornly high rates have pushed a mortgage out of reach for many first-time buyers. That has cooled competition for houses. If these trends hold, we're likely to see price growth flatten or tick down over the next year."

Inventory infusion
New listings from sellers took a larger-than-average step up, rising 8% from April to May, and now stands 13% above last year's extremely low level. The effects of "rate lock" — when owners hold onto their existing homes and low-rate mortgages — are weakening over time. A Zillow survey of recent sellers found a large majority (about 80%) were influenced by life events, such as getting married or having a child, and not necessarily by optimal financial conditions.

But buyers aren't matching sellers' enthusiasm; sales in May were 6% lower than last year.² This helped partially restock the housing shelves, with the number of homes on the market rising 22% compared to last year's near record-low level. Inventory is still 34% below pre-pandemic norms, but that's the smallest deficit in more than three years.

New listings rose the most annually on the West Coast and coastal South, in San Diego, Seattle, Charlotte, Raleigh and the San Francisco Bay Area. Compared to last year, total inventory accumulated the most in major Florida markets, where strong new construction has helped refill the coffers. Buyers saw more listings month over month in every major market except Miami.

Competition and appreciation ease
As a result, competition among buyers eased in May, and home price appreciation cooled with it. Growth in typical home values slowed from 4.4% year over year in April to 3.9% in May — still a healthy, normal rate — while monthly appreciation ticked down from 1.2% in April to 0.8% in May. Home values are still up significantly — more than 45% — since before the pandemic.

Prices have fallen year over year in New Orleans, Austin and San Antonio, while appreciation is strongest in the Northeast and coastal California.

Renters struggling to save up for a down payment may get a slight reprieve in the coming year. Zillow forecasts home values will end 2024 up 0.4% on the year, and tick down 1.4% through May 2025.

What it means for buyers and sellers
Zillow's market heat index shows the nation is becoming a bit friendlier for buyers and is headed toward "neutral" territory, but sellers still hold a slight advantage. Buffalo, Hartford and San Jose are the top markets for sellers among the 50 largest metro areas. New Orleans, Miami, Jacksonville and Memphis are all tilted toward buyers, giving those in the market better leverage in negotiations.

Nationwide, nearly one-quarter of all homes for sale received a price cut in May, the highest share in the past six years for this time of year. There's a good chance that buyers can purchase a lingering property for less than list price. This environment makes experienced agents all the more valuable for both buyers and sellers, to find and negotiate deals for buyers, and to price and market properties correctly for sellers.

Size rank	Metropolitan Area	May Zillow Home Value Index (ZHVI) (Raw)	ZHVI Change, Year over Year (YoY)	ZHVI Change Since Before the Pandemic	Market Favors**	Share of Listings with a Price Cut	Inventory Change, YoY	New Listings Change, YoY
0	United States	$360,310	3.9 %	45.3 %	Sellers	23.9 %	22.1 %	12.6 %
1	New York, NY	$658,603	7.1 %	31.6 %	Strong sellers	13.8 %	-4.6 %	7.3 %
2	Los Angeles, CA	$965,506	8.9 %	42.8 %	Strong sellers	18.1 %	21.1 %	21.3 %
3	Chicago, IL	$321,733	7.0 %	35.7 %	Strong sellers	21.1 %	3.0 %	6.6 %
4	Dallas, TX	$379,252	1.1 %	46.9 %	Sellers	32.0 %	28.9 %	12.5 %
5	Houston, TX	$309,854	1.6 %	38.6 %	Neutral	28.3 %	25.8 %	11.6 %
6	Washington, DC	$569,602	4.7 %	30.7 %	Strong sellers	19.7 %	11.3 %	16.7 %
7	Philadelphia, PA	$362,178	6.7 %	43.8 %	Sellers	20.6 %	5.8 %	12.2 %
8	Miami, FL	$490,511	6.6 %	62.0 %	Buyers	24.5 %	43.5 %	10.8 %
9	Atlanta, GA	$386,798	4.0 %	56.3 %	Neutral	28.0 %	37.5 %	23.4 %
10	Boston, MA	$701,740	8.3 %	42.5 %	Strong sellers	16.9 %	9.7 %	15.6 %
11	Phoenix, AZ	$461,390	4.2 %	53.0 %	Sellers	35.2 %	13.6 %	26.6 %
12	San Francisco, CA	$1,188,868	5.4 %	25.5 %	Strong sellers	18.6 %	27.1 %	29.0 %
13	Riverside, CA	$585,999	6.5 %	52.1 %	Sellers	22.9 %	23.7 %	16.7 %
14	Detroit, MI	$254,098	6.3 %	40.4 %	Sellers	18.1 %	6.2 %	7.8 %
15	Seattle, WA	$754,332	6.4 %	44.8 %	Strong sellers	22.8 %	27.1 %	31.4 %
16	Minneapolis, MN	$376,461	1.3 %	27.4 %	Strong sellers	21.7 %	22.7 %	15.4 %
17	San Diego, CA	$962,786	11.1 %	56.8 %	Sellers	22.9 %	44.4 %	32.5 %
18	Tampa, FL	$381,414	2.8 %	61.8 %	Buyers	36.2 %	60.6 %	24.7 %
19	Denver, CO	$593,732	1.9 %	36.1 %	Sellers	32.9 %	32.2 %	24.5 %
20	Baltimore, MD	$387,455	3.8 %	31.3 %	Sellers	21.9 %	14.7 %	16.3 %
21	St. Louis, MO	$253,143	4.5 %	40.2 %	Strong sellers	19.5 %	12.8 %	5.8 %
22	Orlando, FL	$397,859	3.3 %	54.6 %	Neutral	30.0 %	49.9 %	20.7 %
23	Charlotte, NC	$386,181	5.1 %	59.1 %	Neutral	24.9 %	27.3 %	30.4 %
24	San Antonio, TX	$288,333	-2.2 %	34.7 %	Neutral	32.5 %	29.3 %	3.9 %
25	Portland, OR	$554,465	1.6 %	32.3 %	Strong sellers	25.8 %	23.0 %	14.2 %
26	Sacramento, CA	$586,997	4.3 %	34.5 %	Strong sellers	25.0 %	19.8 %	21.4 %
27	Pittsburgh, PA	$217,968	6.1 %	33.3 %	Sellers	23.1 %	5.6 %	13.0 %
28	Cincinnati, OH	$287,754	5.2 %	47.5 %	Strong sellers	22.0 %	16.1 %	12.1 %
29	Austin, TX	$463,202	-4.1 %	42.4 %	Neutral	30.7 %	14.7 %	14.6 %
30	Las Vegas, NV	$429,369	7.1 %	44.4 %	Sellers	23.3 %	3.5 %	23.1 %
31	Kansas City, MO	$306,002	3.9 %	45.8 %	Strong sellers	23.3 %	27.8 %	15.5 %
32	Columbus, OH	$314,999	5.5 %	49.7 %	Strong sellers	24.3 %	25.9 %	21.8 %
33	Indianapolis, IN	$281,991	3.5 %	50.7 %	Sellers	27.9 %	21.2 %	12.2 %
34	Cleveland, OH	$230,953	7.5 %	46.3 %	Strong sellers	18.7 %	0.4 %	7.1 %
35	San Jose, CA	$1,644,202	12.7 %	41.7 %	Strong sellers	14.5 %	21.0 %	28.5 %
36	Nashville, TN	$445,552	2.1 %	48.7 %	Neutral	32.8 %	17.5 %	13.5 %
37	Virginia Beach, VA	$351,401	5.5 %	41.0 %	Sellers	19.5 %	17.1 %	10.1 %
38	Providence, RI	$483,313	8.2 %	51.6 %	Strong sellers	15.4 %	9.0 %	11.0 %
39	Jacksonville, FL	$360,547	1.4 %	52.3 %	Buyers	32.7 %	45.6 %	16.2 %
40	Milwaukee, WI	$348,435	6.5 %	42.3 %	Strong sellers	11.4 %	12.8 %	17.1 %
41	Oklahoma City, OK	$235,307	2.4 %	42.9 %	Neutral	27.2 %	23.1 %	12.6 %
42	Raleigh, NC	$448,858	3.0 %	53.4 %	Sellers	29.2 %	35.3 %	29.1 %
43	Memphis, TN	$242,300	1.8 %	46.6 %	Buyers	27.1 %	24.2 %	5.1 %
44	Richmond, VA	$372,353	5.0 %	46.9 %	Strong sellers	20.7 %	15.9 %	12.6 %
45	Louisville, KY	$258,522	3.7 %	37.0 %	Sellers	23.9 %	27.7 %	20.1 %
46	New Orleans, LA	$241,191	-5.9 %	5.0 %	Buyers	27.0 %	22.3 %	5.8 %
47	Salt Lake City, UT	$548,530	2.7 %	46.3 %	Sellers	30.1 %	19.4 %	14.2 %
48	Hartford, CT	$363,763	11.6 %	56.3 %	Strong sellers	12.0 %	15.9 %	16.2 %
49	Buffalo, NY	$264,111	7.5 %	51.4 %	Strong sellers	14.5 %	1.8 %	2.6 %
50	Birmingham, AL	$254,484	0.0 %	37.6 %	Sellers	24.1 %	22.0 %	12.0 %

*	Table ordered by market size
**	Based on Zillow 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.
²	Tracked by Zillow's Sales Count NowCast.

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