According to Zillow’s latest market report, new listings across the US reached a record low for August, with a 7.3 per cent month-over-month drop that exceeds typical seasonal patterns.Â
This seller retreat comes as buyers continue to face affordability challenges.
Despite the slowdown in new inventory, total housing supply remains 15.3 per cent higher than last year, providing opportunities for active buyers.
However, the competitive momentum that had been swinging in buyers’ favour is showing signs of stabilising.
Zillow Senior Economist Kara Ng suggests buyers should act now while conditions remain favourable.Â
“Buyers who can afford a home and have been waiting for the right moment should look closely at what’s available now,” Ms Ng said.
“Options are on the shelves, even if they’re not all fresh. Sidelined buyers should revisit their budget; mortgage rates are lower than recent years, and in some markets, sellers are more willing to deal.”
Home value appreciation has essentially flatlined, with Zillow’s Home Value Index showing no growth over the past year, the second-slowest annual growth rate since early 2018.
Meanwhile, homes are taking longer to sell, with the typical property spending 27 days on the market before finding a buyer, a full week longer than last year.
The percentage of listings with price cuts has moderated slightly to 25.8 per cent, down from the all-time high of 27 per cent recorded in July, suggesting that the market may be finding a new equilibrium.
Regional differences remain pronounced across the country. Southern markets that were pandemic-era hotspots, including Miami, Tampa, Jacksonville, and Austin, now favour buyers with inventory levels exceeding pre-pandemic norms.Â
Seattle has also made a surprising transition to a buyer’s market, with inventory rising 22 per cent over the past year.
In contrast, the Northeast and the San Francisco Bay Area continue to favour sellers.Â
Markets like Buffalo, Hartford, San Francisco, San Jose, and Boston remain highly competitive due to persistently low inventory levels that sit well below pre-pandemic averages.
Current homeowners appear reluctant to give up properties with low mortgage rates and substantial equity gains.
Typical home values nationwide have increased by 46.5 per cent since February 2020, giving many homeowners little incentive to sell in the current environment.
The labour market also plays a significant role in selling decisions.
Zillow’s survey of recent sellers found that 37 per cent were motivated to sell after accepting a new job, suggesting that a weakening job market could further reduce listing activity.
For buyers still in the market, the current conditions offer a window of opportunity, though it may not last indefinitely.
“Don’t expect this window of opportunity to stay open indefinitely. Buyers’ leverage is easing as many sellers put their plans to list on hold,” Ms Ng said.
