Influx of sellers arrives just in time for spring season
- New listings on Zillow rose 21% annually, with the South experiencing the highest gains.
- Total inventory increased by 12% compared to last year, with Dallas, Tampa, Orlando, and Miami showing the highest annual increases.
- Competition for well-priced listings is strong, with homes going pending in 17 days on average.
- Price cuts are more common, with 1 in 5 listings seeing reductions to attract buyers.
- The typical home value in the U.S. is $349,216, up 40.8% from pre-pandemic levels.
- None.
Insights
The recent surge in new listings, up by 21% annually, is a significant indicator of movement in the housing market. This rise suggests a possible easing of the 'rate lock' effect, where homeowners are disinclined to sell due to higher prevailing mortgage rates compared to their current ones. The increase in inventory, especially in the South, may be attributed to the new construction giving existing homeowners more options to relocate, thereby freeing up more existing homes for sale.
From an economic perspective, the increase in supply could temper the rapid price appreciation seen in recent years. However, strong competition for desirable properties, as indicated by homes going under contract in just 17 days, suggests that demand remains robust. The presence of price cuts in one-fifth of the listings could indicate a market adjustment where sellers are realigning their expectations with current market conditions. This scenario is a departure from the seller's market observed over the past few years and could lead to a more balanced market dynamic.
Analyzing the market trends, the significant inventory increases in cities like Dallas, Tampa, Orlando and Miami highlight regional disparities in market recovery and growth. The South's strong performance could attract more buyers and investors to these areas, potentially impacting regional economies. However, the fact that homes are still selling relatively quickly indicates sustained buyer interest, which could support home prices despite the increased inventory.
It's important to note the variation in market response to aspirationally priced listings versus well-priced properties. This distinction emphasizes the importance of accurate pricing and market positioning for sellers. Additionally, the data showing that typical home values have risen 41% nationwide since before the pandemic underlines the substantial equity gains homeowners have experienced, which could influence their selling decisions and financial flexibility.
The housing market dynamics, as reflected in the increased listings and inventory, could have implications for various stakeholders. For homebuilders and real estate companies, the data suggests a healthier inventory level that could stabilize sales volumes. However, the rising mortgage rates, which have increased the cost of a mortgage on a typical home by 9.4% compared to last year, may affect affordability and potentially slow down the pace of home buying.
Investors in real estate investment trusts (REITs) or housing-related stocks should monitor these trends closely, as they could influence company performance and stock valuations. The impact on the stock market could be mixed, with potential benefits for companies involved in home construction and renovation, while mortgage lenders might face headwinds from the higher rates.
New listings are up
- New listings rose annually in every major metro.
- Total inventory rose
12% year over year; the largest gains came in the South. - Competition is stiff for attractive listings; homes went pending in just 17 days nationwide.
"For more than a year, Zillow homeowner surveys have shown an elevated share of homeowners expecting to sell in the next three years. We're finally beginning to see owners who have been putting off moves return to the market," said Skylar Olsen, chief economist at Zillow. "For many households with record-high equity, waiting out potentially lower rates later in the year may not be worth it."
More choices for buyers
Buyers are seeing more choices on the market, which should help spur sales this spring.
New listings of existing homes on Zillow are up
Total inventory is increasing significantly as well, up
Stiff competition for attractive listings
Despite February's supply increase, competition remains strong for attractive, well-priced listings. Homes that went under contract in February typically did so after 17 days — that's slower than during the rate-fueled frenzy of 2021 and 2022, but far faster than before the pandemic.
Aspirationally priced listings, or those lacking real or virtual curb appeal, are lingering on the market. The average time on Zillow for all homes was 53 days, which is longer than normal for this time of year.
Price cuts are more common than normal — 1 in 5 listings on Zillow are seeing cuts — as sellers bring their expectations closer to where buyers can meet them. Most sellers will have plenty of cushion to absorb a price cut and come out ahead from when they bought their home. Typical home values are up from last year in all but three major metros, and values have risen
Housing costs continue to climb
The typical home in the
Mortgage rates rose in February, helping bump the cost of a mortgage on a typical home
Metropolitan Area* | February | ZHVI | Median | Change in | Share of | Inventory | New |
4.2 % | 17 | -10 | 20.1 % | 12.0 % | 20.8 % | ||
7.0 % | 26 | -31 | 10.3 % | -14.8 % | 3.7 % | ||
8.3 % | 14 | -6 | 14.0 % | -3.1 % | 18.0 % | ||
7.3 % | 9 | -16 | 16.7 % | -4.5 % | 18.1 % | ||
1.3 % | 19 | -9 | 25.9 % | 38.8 % | 50.7 % | ||
1.2 % | 28 | 2 | 24.5 % | 14.8 % | 23.1 % | ||
4.3 % | 6 | -17 | 15.4 % | -6.3 % | 10.9 % | ||
7.7 % | 9 | -27 | 17.6 % | -4.7 % | 7.6 % | ||
7.5 % | 35 | -9 | 23.8 % | 28.6 % | 31.8 % | ||
4.4 % | 22 | 6 | 22.6 % | 15.5 % | 32.1 % | ||
8.8 % | 8 | -5 | 10.7 % | -1.1 % | 13.5 % | ||
4.0 % | 20 | -7 | 32.1 % | -10.8 % | 19.0 % | ||
2.5 % | 12 | -2 | 11.7 % | 1.9 % | 19.2 % | ||
6.1 % | 18 | -7 | 18.7 % | -1.0 % | 19.6 % | ||
6.5 % | 11 | -11 | 17.9 % | -3.4 % | 16.2 % | ||
4.4 % | 6 | -4 | 13.9 % | -1.0 % | 32.2 % | ||
2.0 % | 19 | -2 | 15.5 % | 22.5 % | 40.4 % | ||
10.8 % | 10 | -11 | 16.8 % | 8.4 % | 22.5 % | ||
3.6 % | 26 | 2 | 32.8 % | 30.7 % | 32.6 % | ||
1.7 % | 9 | 2 | 21.6 % | 9.4 % | 19.6 % | ||
4.2 % | 7 | -29 | 18.8 % | 2.1 % | 16.3 % | ||
6.2 % | 7 | -16 | 16.9 % | 9.3 % | 12.7 % | ||
4.1 % | 24 | 4 | 25.2 % | 29.5 % | 31.3 % | ||
4.6 % | 13 | 0 | 19.7 % | 0.1 % | 21.6 % | ||
-2.5 % | 44 | 4 | 27.0 % | 24.7 % | 20.3 % | ||
2.3 % | 15 | 1 | 19.0 % | 14.7 % | 22.0 % | ||
3.4 % | 9 | -4 | 17.3 % | -12.4 % | 16.3 % | ||
5.8 % | 12 | -40 | 20.5 % | -0.3 % | 11.6 % | ||
6.2 % | 5 | -13 | 19.1 % | 13.7 % | 18.6 % | ||
-5.1 % | 40 | 26 | 21.3 % | 6.5 % | 37.1 % | ||
4.6 % | 17 | -9 | 18.5 % | -22.5 % | 19.0 % | ||
5.4 % | 6 | -13 | 19.3 % | 15.2 % | 26.3 % | ||
6.3 % | 5 | -3 | 20.7 % | 13.0 % | 15.9 % | ||
3.1 % | 12 | -12 | 21.8 % | 13.4 % | 14.0 % | ||
7.4 % | 9 | -40 | 16.0 % | -5.1 % | 3.1 % | ||
8.8 % | 9 | -4 | 8.3 % | 0.3 % | 24.2 % | ||
1.8 % | 21 | 0 | 26.5 % | -1.4 % | 12.3 % | ||
6.0 % | 24 | -46 | 16.6 % | 9.3 % | 14.4 % | ||
8.4 % | 9 | -25 | 13.2 % | -4.1 % | 4.0 % | ||
1.2 % | 34 | -1 | 26.8 % | 17.9 % | 29.8 % | ||
7.5 % | 22 | 12.2 % | 11.7 % | 12.6 % | |||
3.6 % | 19 | -50 | 23.6 % | 28.4 % | 28.0 % | ||
3.0 % | 11 | 3 | 23.8 % | 4.4 % | 18.0 % | ||
1.4 % | 31 | -10 | 22.0 % | 28.5 % | 24.6 % | ||
5.4 % | 7 | -7 | 17.8 % | 9.1 % | 16.4 % | ||
4.4 % | 9 | -14 | 22.9 % | 11.9 % | 13.9 % | ||
-7.5 % | 42 | 4 | 22.2 % | 23.2 % | 20.5 % | ||
1.6 % | 15 | 3 | 20.7 % | 0.0 % | 25.5 % | ||
12.5 % | 6 | -27 | 11.2 % | 2.1 % | 5.5 % | ||
7.5 % | 11 | -17 | 11.9 % | -9.1 % | 1.6 % | ||
1.3 % | 14 | -5 | 19.7 % | 10.5 % | 14.9 % |
*Table ordered by market size
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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.
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