Home buyers gain breathing room with late-summer slowdown on the way
Steady demand is keeping the heat turned up, but early signs point to a late-summer seasonal cooldown
- Houses are spending more time on the market than in the spring, but still half as long as in 2019.
- Buyers still have few choices for existing homes as inventory reached new record lows for July.
- Home values rose from June to July in every major metro area except
Austin .
"The housing market is returning to normal seasonal patterns, and that's a positive sign for buyers who faced stiff competition this spring," said Zillow senior economist Nicole Bachaud. "As summer winds down and kids head back to school, home shopping gets put on the back burner. Traditionally, buyers who remain in the market gain a bit more bargaining power heading into the fall. This year, however, sellers are sticking to the sidelines, which means even fewer options and high prices."
The typical
Slowing sales give buyers a bit of breathing room
Easing monthly appreciation is one sign that the normal seasonal pendulum of the market is swinging back in favor of buyers. Homes are also spending longer on the market before going under contract — 12 days in July compared to 11 in June and 10 in April and May. That's still half as long as in 2019.
The volume of newly pending sales also slowed down along seasonal trend lines, falling about
The number of listings with a price cut ticked up slightly from June as well. The share is right in line with pre-pandemic norms at about
Inventory drought marches on amidst high mortgage rates
Total active inventory in July was down
"Buyers should not expect to see many more homes available for sale on Zillow at any time this year than they do now," Bachaud said. "Inventory will decline from here if it follows pre-pandemic trends."
Homeowners are stubbornly holding on to their houses. New listings of existing homes once again set a new seasonal low-water mark, as roughly 336,000 came to market in July. That's
New listings have been scarce for a year now, and the most likely cause — high mortgage rates — remains. A recent Zillow survey found some evidence that the gap between homeowners' existing mortgage rates and today's rates can help explain their reluctance to sell: Owners with a rate of
Builders are helping bridge the inventory gap, ramping up new home sales now that it's clear the supply of existing homes isn't meeting demand. Builders are also getting more creative in order to offer buyers an affordable product, turning to smaller homes, more townhouses, and interest-rate buydowns.
Rents are climbing slightly faster than normal for July
After its own record-breaking run that saw annual rent price growth peak at
Metropolitan Area* | July Zillow Home Value Index (ZHVI) (Raw) | ZHVI Change, Month over Month (YoY) | Monthly Mortgage Payment ( | Monthly Mortgage Payment Change Since July 2019 | Newly Pending Sales Change, YoY | New Inventory Change, YoY | Total Inventory Change, YoY |
1.4 % | 108 % | -14.5 % | -25.7 % | -14.8 % | |||
3.7 % | 84 % | -21.5 % | -35.0 % | -30.3 % | |||
-0.5 % | 95 % | -14.2 % | -28.3 % | -29.7 % | |||
3.7 % | 85 % | -12.6 % | -25.8 % | -27.8 % | |||
-2.9 % | 103 % | -14.4 % | -23.8 % | 0.7 % | |||
-1.1 % | 98 % | -8.2 % | -22.7 % | 0.4 % | |||
1.3 % | 82 % | -21.1 % | -30.7 % | -34.6 % | |||
5.3 % | 101 % | -21.9 % | -23.2 % | -24.4 % | |||
5.3 % | 128 % | -6.7 % | -25.1 % | -1.5 % | |||
-0.3 % | 122 % | -21.4 % | -28.1 % | -17.2 % | |||
1.7 % | 87 % | -29.5 % | -33.3 % | -32.1 % | |||
-6.1 % | 114 % | -13.2 % | -47.8 % | -37.8 % | |||
-5.0 % | 77 % | -12.5 % | -30.2 % | -35.0 % | |||
-2.2 % | 104 % | -16.2 % | -32.4 % | -28.7 % | |||
3.8 % | 94 % | -14.5 % | -24.9 % | -24.8 % | |||
-2.1 % | 95 % | -23.1 % | -35.6 % | -38.5 % | |||
-0.3 % | 81 % | -14.6 % | -25.0 % | -20.3 % | |||
-0.9 % | 105 % | -12.8 % | -33.9 % | -38.9 % | |||
-1.7 % | 132 % | -8.7 % | -25.6 % | -9.4 % | |||
-2.2 % | 85 % | -7.7 % | -23.4 % | -12.6 % | |||
4.6 % | 85 % | -22.1 % | -30.7 % | -28.2 % | |||
4.1 % | 99 % | -9.6 % | -14.3 % | -11.1 % | |||
0.0 % | 115 % | -14.4 % | -26.7 % | -13.5 % | |||
0.2 % | 127 % | -63.5 % | -39.0 % | -13.3 % | |||
-1.7 % | 104 % | -19.2 % | -26.9 % | 13.4 % | |||
-1.9 % | 87 % | -19.5 % | -30.7 % | -20.0 % | |||
-3.9 % | 86 % | -16.4 % | -35.2 % | -37.3 % | |||
1.5 % | 88 % | -14.8 % | -24.4 % | -18.4 % | |||
5.0 % | 107 % | -22.9 % | -28.9 % | -26.4 % | |||
-10.4 % | 110 % | -9.0 % | -34.7 % | -2.5 % | |||
-6.0 % | 86 % | -4.5 % | -49.8 % | -41.6 % | |||
5.0 % | 107 % | -12.8 % | -21.1 % | -17.4 % | |||
4.1 % | 108 % | -19.3 % | -26.4 % | -21.4 % | |||
2.6 % | 118 % | -21.1 % | -25.5 % | -15.1 % | |||
4.0 % | 98 % | -16.1 % | -28.2 % | -22.2 % | |||
-2.3 % | 85 % | 110.2 % | -33.6 % | -44.1 % | |||
-2.2 % | 120 % | -21.0 % | -36.3 % | -10.1 % | |||
3.5 % | 93 % | -22.6 % | -21.2 % | -22.6 % | |||
2.6 % | 101 % | -31.4 % | -32.4 % | -33.7 % | |||
-1.7 % | 123 % | -11.2 % | -30.2 % | 0.4 % | |||
5.2 % | 87 % | -6.8 % | -27.3 % | -28.4 % | |||
3.9 % | 107 % | -18.4 % | -24.5 % | -1.7 % | |||
-2.5 % | 113 % | -22.7 % | -37.3 % | -28.8 % | |||
0.4 % | 116 % | -24.1 % | -16.5 % | 3.5 % | |||
5.4 % | 107 % | -27.3 % | -33.1 % | -32.0 % | |||
2.9 % | 93 % | -0.2 % | -24.9 % | -20.9 % | |||
-1.7 % | 75 % | 2.6 % | -19.5 % | 18.1 % | |||
-1.8 % | 109 % | -14.1 % | -28.1 % | -18.6 % | |||
5.7 % | 91 % | -21.2 % | -22.1 % | -23.3 % | |||
2.2 % | 98 % | -21.0 % | -20.4 % | -19.8 % | |||
1.9 % | 108 % | -22.7 % | -27.4 % | -8.4 % |
* | Table ordered by market size |
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 | The originally published ZHVI figure of |
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