Zillow says the housing market is experiencing a surge in inventory, giving homebuyers more options. James Marshall/Getty Images
According to Zillow, about a quarter of homes on the market saw their prices reduced in June.
This is the highest rate for this time of year since 2018.
Real estate companies said rising costs and rising inventory have led to less competition.
Zillow said the U.S. housing market appears to be regaining some balance as price cuts give buyers a foothold.
In its June report, real estate companies said weak competition forced prices to be cut on 24.5% of residential listings in the month, the highest rate of price cuts for the month since 2018.
Zillow said changing market conditions are causing sellers to slash their prices, while stubbornly high prices are discouraging buyers from buying, while those still in the market are now seeing more options.
That’s as inventory continues to build — the total number of homes for sale is now 23% above last year’s low — and a booming construction industry has eased supply shortages, making buyers less reliant on existing-home sales.
In fact, today’s high mortgage rates are making it cheaper to buy a new home than a pre-owned one because many homeowners are reluctant to sell, Realtor.com reported Wednesday. The average price difference was $7,100 in May, according to the company’s calculations.
To be sure, housing inventory is still well below pre-pandemic averages, but the imbalance between demand and supply has narrowed to its smallest since 2020, Zillow said.
While prices are still trending upward overall, buyers aren’t seeing the same rate of increase that has characterized much of the post-pandemic era: June’s monthly increase was the lowest for this time of year since 2011, pushing the national average up to $362,482, according to the firm.
The housing market remains a sellers’ market, but weakening demand is eroding the advantage homeowners have over buyers: Home sales fell instead of increased in June for the first time in four years.
Regionally, there are several buyers’ markets in the U.S., especially in the South. New Orleans, Miami, Austin, Jacksonville and Tampa were the most promising markets for homebuyers, according to Zillow.
This is in line with a recent report from Redfin that noted Florida and Texas markets are leading the price declines, as a pandemic-induced construction boom has left both states overcrowded with homes and driving out buyers due to soaring prices and rising insurance costs.
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