Influx of Sellers Arrives Just in Time for Spring Shopping Season (February 2024 Market Report)
A substantial infusion of new inventory to the market is welcome news for buyers on the hunt for their next home this spring – and more evidence that the effects of ‘rate lock’ are starting to weaken. New listings of existing homes on Zillow are up 21% in February compared to last year, and rose 20% from January.
There has been persistent evidence of pent up sellers in Zillow homeowner surveys since the first quarter of 2023 – an elevated share of owners expecting to sell in the next three years. We’re likely finally beginning to see more of those sellers that have been putting off moves return to the market. Mortgage rates are notoriously hard to predict, and for many households, the prospect of potentially lower rates may not be worth waiting for.
New listings are coming on strongest compared to last year in the South – especially Texas and Florida. Substantial new construction in these areas is likely helping to free up existing homeowners and the market in general.
Total inventory is increasing significantly as well – up 12% compared to last year nationally and far more. In the South: Annual increases are highest in Dallas (up 39%), Tampa (31%), Orlando (30%), and Miami (29%).
Ultimately, limited supply means retirees looking to relocate or downsize will still be able to capitalize on near-record high home equity across the country.
The large generation of potential first time home buyers will be hoping new listings continue to climb. Despite February’s supply increase, competition remains stout for attractive, well-priced listings. Homes that sold in February did so in 17 days – that’s slower than during the rate-fueled frenzy of 2021 and 2022, but far faster than pre-pandemic.
Those listings priced incorrectly, or lacking real or virtual curb appeal, are loitering on the market. Price cuts are more common than normal – one in five listings on Zillow are seeing cuts as sellers bring their expectations closer to where buyers can meet them, especially after a recent upswing in mortgage rates.
Home values
The value of a typical home in the US is $349,216 – up 40.8% compared to pre-pandemic. The typical monthly mortgage payment, assuming 20% down, is $1,809.
- Home values climbed month-over-month in 45 of the 50 largest metro areas in February. Gains were largest in expensive coastal metros: San Jose (1.6%), San Diego (1.3%), Seattle (1.2%), San Francisco (0.8%), and Washington, D.C. (0.8%).
- Home values fell very slightly on a monthly basis in two major metro areas: Birmingham (-0.1%), and New Orleans (-0.1%). San Antonio, Pittsburgh and Buffalo held stable from January to February.
- Home values are up from year-ago levels in 47 of the 50 largest metro areas. Annual price gains are highest in Hartford (12.5%), San Diego (10.8%), San Jose (8.8%), Boston (8.8%), and Providence (8.4%).
- Home values are down from year-ago levels in three major metro areas. The largest drops were in New Orleans (-7.5%), Austin (-5.1%) and San Antonio (-2.5%). Houston (1.2%) and Jacksonville (1.2%) saw the smallest gains. New construction has been better able to keep up with demand in the South, including Florida and Texas, bringing appreciation back to earth there after extreme pandemic-era growth.
- The typical mortgage payment is up 9.4% from last year and has more than doubled over the course of the pandemic, rising by 106.4%.
New listings
- New listings increased by 20.3% month-over-month in February – the largest monthly increase since at least 2018 by a significant margin.
- The flow of new listings to the market in February is 20.8% higher than at this time last year, giving buyers many more fresh choices.
- Metros where the most sellers are jumping back into the market, compared to last year, are Dallas (up 50.7%), Minneapolis (40.4%), and Austin (37.1%).
Total inventory
- Total inventory in February (the number of listings active at any time during the month) rose 3.4% from January.
- There were 12% more listings active in February compared to last year.
- Inventory rose annually in 33 of the 50 largest US markets, growing the most in Dallas (38.8%), Tampa (30.7%), and Orlando (29.5%).
Competition
Time on market:
- Attractively priced and well-marketed homes are selling quickly – listings that sold in February stayed on the market just 17 days before going under contract. That’s slightly slower for this time of year than in 2021 or 2022, but far faster than before the pandemic.
- But poorly prepared or priced listings are still 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 and sold over list:
- Sellers are adjusting to the market with price cuts. In February, one in five homes on Zillow had a price cut – about five percentage points higher than pre-pandemic norms.
- Price cuts are most common in Tampa (32.8%), Phoenix (32.1%), San Antonio (27%), Jacksonville (26.8%) and Nashville (26.5%).
- 24.3% of homes sold above their list price in January 2024. That’s compared to 21.5% that sold over list a year before, and 26.4% that sold over list in December 2023.
Newly Pending Sales
- Newly pending listings increased by 14.2% in February from the prior month.
- Newly pending listings increased by 1.4% from last year.
Rent
- The typical U.S. rent is $1,959. Annual rent growth continued to stay stable at 3.5%, virtually unchanged since August.
- Asking rents increased by 0.4% month-over-month in February – right in line with pre-pandemic averages for this time of year.
- Rents are up from year-ago levels in 47 of the 50 largest metro areas. Annual rent increases are highest in Providence (8.1%), Cleveland (6.9%), Louisville (6.7%), Hartford (6.4%), and Cincinnati (6.4%).
Read more about the rental market in Zillow’s February Rental Market Report.