The US housing market looks to be regaining some balance, with price cuts helping buyers find their footing, Zillow said.
In its June report, the real estate firm found that cooler competition forced price reductions on 24.5% of home listings that month, the highest rate of discounting in the month of June since 2018.
Sellers are slashing prices as market conditions have shifted — stubbornly high costs have led to a pullback among buyers, while those still in the market have more options, Zillow said.
That’s due to a continued pile-up of inventory, with the total number of homes for sale now 23% above last year’s lows. Booming construction has helped alleviate the supply crunch, while also easing buyer reliance on sales of existing homes.
In fact, with many homeowners not selling due to today’s high mortgage rates, it’s become cheaper to buy a new home instead of a used one, Realtor.com reported on Wednesday. In May, the median price difference was $7,100, it calculated.
To be sure, housing inventory is still well below pre-pandemic averages, but the demand-supply imbalance has shrunk to its smallest since 2020, Zillow said.
And although prices are still on the rise overall, buyers are not facing the same rate of appreciation that has defined most of the post-pandemic era. In June, the monthly growth rate was at its lowest since 2011 for this time of year, the firm said, climbing to a national average of $362,482.
While housing remains a seller’s market, the demand pullback has diminished the edge homeowners have held over buyers. For the first time in four years, sales fell in June instead of ticking up.
Regionally, there are some buyers’ markets in the US, especially in the South. New Orleans, Miami, Austin, Jacksonville, and Tampa were the strongest markets for prospective home buyers, according to Zillow.
That’s in line with recent reports from Redfin, which has noted that markets in Florida and Texas are leading price declines. A surge of pandemic construction left both states with an overflow of homes, while high prices and rising insurance costs are pushing buyers out.
