How the Least Expensive Homes are Suddenly Having a Moment

The beginning of summer marked a broad rebound from May's stumble, with home sales up 5.9% from a year ago. But the sharpest upturn happened at the bottom of the market. For homes with values in the lowest 5% of the market, both pending sales and listings both grew faster YoY than they have since 2022. 

“Buyers considering the cheapest homes have an advantageous shopping environment — more choices and more negotiating power, as the bottom-tier homes see more inventory and more price cuts, especially compared to luxury homes," says Zillow Senior Economist Kara Ng. “If you’re a first-time home buyer who’s targeting a starter home, this is probably the best setup you’ve seen in years.”

Here are three numbers that can inform where to focus your outreach.

Entry-level inventory is piling up

Stat: Active inventory for the lowest-priced homes rose 12.2% YoY — the biggest jump of any price tier.

June was the first time since 2022 that the bottom led the market in this metric. Even with pending sales climbing, listings at the bottom grew faster than any other price tier — the first time the least expensive homes have topped the market on both supply and demand since 2022. But the trend isn’t universal; in markets like San Jose and Las Vegas, bottom-tier inventory is still tighter YoY.

Nationally, the result is downward pressure on prices right where affordability matters most — the share of low-end homes selling below list climbed nearly 3% from a year ago. Prices are softening at the bottom precisely because listing activity there is booming. 

Consider: Run a saved search for bottom-tier listings that have lingered, then reconnect with the fence-sitters in your sphere — the negotiating math has shifted in their favor faster than they realize.

Pending sales at the low end are climbing fastest

Stat: Newly pending listings for the lowest 5% of home values rose 10.3% YoY — the first time since 2022 this tier led the market.

For most of the post-2022 stretch, the least expensive homes moved the fastest and were the toughest to land. But with inventory mounting, more buyers are stepping off the sidelines here first — a signal to concentrate your efforts on entry-level listings and to reconnect with the first-time buyers in your sphere.

Consider: Set alerts for new bottom-tier listings and have your waiting first-timers get pre-approved now so you can tour and write offers within days.

Most low-end homes are selling below asking

Stat: 67.6% of bottom-tier homes sold below list in May 2026, up 2.9 percentage points YoY.

Bottom-tier homes are now also more likely to get a price cut than luxury homes. They’re also far less likely to draw a bidding war — just 16% of low-end homes sold above list versus 24% at the top. The influx of listings in this price band met a wave of buyers, but the extra supply tipped negotiating power toward shoppers. 

Consider: Because the seller is likely fielding fewer bids at this end of the market, write your below-list offers with a short expiration and attach a specific ask, like repairs or closing cost concessions.