The number of homes available for sale in the U.S. surged to 1.36 million in June, the most since November 2019, according to Zillow.
Thats up 2.3% compared with May and up a whopping 17.2% compared with June 2024.
However, there is extreme variation from market to market. In some markets, particularly in the Northeast, inventory is scarce and home prices remain elevated. Thus, those markets have remained sellers markets, so far. Whereas in other areas, such as Texas and Florida, there has been a glut of new and existing homes coming onto the market, driving down home prices, thus changing those markets to buyers markets.
The national market is now balanced or in buyers’ favor in 28 of the 50 largest U.S. metros, Zillow says.
A record-high 26.6% of listings dropped prices in June, with cuts most common in the Sun Belt and Mountain West, the firm reports. Cuts were most common in Denver (38%), Raleigh (36%), Dallas (36%), Phoenix (35%) and Nashville (35%).
“The shift to a ‘neutral’ market is significant, but it shouldn’t be mistaken for a universally cool or easy market for buyers,” says Kara Ng, senior economist for Zillow. “While negotiating power is more balanced, the affordability crisis remains a high barrier to entry, especially for first-time buyers. Until we see a more meaningful improvement in purchasing power, this newfound balance will primarily benefit more well-off buyers.”
Inventory is still roughly 21% below pre-pandemic averages for June, but that deficit is expected to continue shrinking.
Zillow forecasts inventory to approach pre-pandemic levels by the end of the year.
Home value growth is at a stand still and mortgage costs have ticked down ever so slightly from a year ago. But high prices and borrowing costs are still putting up high affordability hurdles for buyers, especially first-timers.
Photo: Richard Horne