September Market Report: Why Inventory Is Up but New Listings Are Down

For months, buyers have steadily benefited from a record surge in new listings, but a sudden pullback by sellers in August has slowed that momentum even as borrowing costs dropped to their lowest level in a year.

The number of U.S. homes for sale is still near a six-year high, according to Zillow data. But, without more new listings, that abundance may not last.

“The housing market is shifting, but not in one uniform direction,’’ says Zillow Senior Economist Kara Ng. 

Here’s how the market’s shaping up as we move into the fall.

New listings are at a record low

Total inventory is up 15% year over year, but new listings have slowed dramatically, dropping 7.3% month over month in August. The decline represents a record low for August on Zillow’s records.

Homeowners listed their homes in droves in the first half of this year, leading to lingering listings, longer selling times, and diminished seller negotiating power. Would-be sellers, now seeing the tougher environment, might be opting to wait. After all, today’s homeowners are in a relatively strong financial position, having nailed down super-low mortgage rates on homes that are worth as much as 46.5% more nationally than they were only four years ago. Plus, not many are forced to sell, like they were during the Global Financial Crisis.

Sellers may be responding to the weak job market and rising unemployment; 37% of recent sellers in a Zillow survey said their move was influenced by a new job.

Homes take longer to sell

The market has been rebalancing in buyers’ favor for most of the past year, but the high cost of buying continues to sideline borrowers. As a result, homes are taking longer to sell.

 A typical home in August found a buyer 27 days after listing, a week longer than a year ago. 

“This signals a return to a more balanced market rhythm, where a rushed, high-pressure sale is less common,” Ng says. “Homes that are priced correctly and marketed well, sell quickly. Those that aren’t, may hang around for a while.”

For buyers, the longer market times could mean more opportunities to negotiate price or terms. For sellers, it means having more time to find a buyer at the right price.

To help their homes stand out, sellers can list their home with Zillow Showcase℠, which now includes SkyTour, a Zillow 3D offering that provides an immersive, drone-based virtual tour of a home’s exterior.

The South remains the friendliest for buyers

New construction in the South has helped turn markets like Miami, Tampa, and Austin that were previously seller hot spots into buyer’s markets. One new addition to the list of buyer-friendly markets: Seattle, which ranks 14th on the list of buyer’s markets after experiencing a bump in inventory. 

Competition remains stiff in metros like Buffalo, Hartford, Boston, and San Francisco, where buyers continue to outnumber sellers.

While home values are up from last year, only two of the nation’s 50 largest metros eked out gains in August: Buffalo (up 0.5%) and New Orleans (up 0.3%).

Meanwhile, 45 of the top 50 metros saw home values drop this month, led by San Jose (-1.7%), San Francisco (-1.4%), Austin (-0.8%), Seattle (-0.8%), and San Diego (-0.8%).

You can help buyers understand what could constitute a winning offer in your market by using Zillow’s Offer Insights feature, which analyzes an offer’s competitiveness and local market dynamics. 

To see where your market stands, check out Zillow’s Market Heat Index.