Price Cuts Abound as Home Sellers See Inventory Piling Up (June 2024 Market Report)
Home listings are piling up as buyers step back from peak home shopping season faster than normal. As competition cools, sellers are stepping up price cuts to try and entice buyers struggling with affordability.
A housing market that for years has been defined by fast sales and few options is starting to look more like it did before the pandemic in terms of competition among buyers and their negotiating power, if not costs.
Inventory refill continues
The total number of homes on the market has risen throughout the year, ticking up 4% from May to June to stand nearly 23% above last year’s low level. While inventory levels are still about 33% below pre-pandemic averages, that’s the smallest deficit since the fall of 2020 – when the pool of available homes was quickly dropping due to record-low mortgage rates and the explosion of remote work during the first year of the pandemic.
Well-priced and marketed listings are still selling relatively quickly. But buyers are enjoying a few more days to weigh their choices than they had last summer. Homes sold in June were typically on the market for 15 days before the seller accepted an offer. That’s five days shorter than pre-pandemic norms, the smallest difference since June 2020.
High costs weigh on buyers
While mortgage rates have eased from May peaks, buyers are still contending with costs that have risen far faster than wages. A median-income household can afford mortgage payments when buying a typical home in just nine of 50 major markets, even when putting 20% down. Put a different way, the U.S. median-income household would need to put 35.4% down – $127,000 – to bring the monthly price to an affordable level, where less than 30% of their income goes toward monthly mortgage payments.
With many buyers pushed to the sidelines by costs, Zillow’s count of home sales for May was 27% below pre-pandemic. Zillow’s Sales Nowcast peaked in May this year before taking a 9% step down in June, defying a trend of ticking up in June over the past four years. Sales are now 35% lower than pre-pandemic norms.
Slowing appreciation could give buyers a break
With the rise in inventory, home value growth has pulled back. Annual appreciation is 3.2% nationally – down from a 2024 peak in March of 4.6%. Monthly growth has decelerated to 0.6% – the slowest June appreciation since 2011.
Slower home value growth in the months ahead could give struggling buyers a chance to catch up – Zillow forecasts home values to rise just 1% nationally through June 2025.
Cooling competition brings on price cuts
While sellers still have a slight edge nationally, Zillow’s market heat index shows a balanced market may be just over the horizon. Competition is easing fastest in the South – all major Southern markets are either neutral or buyer-friendly, with the exception of Dallas and Raleigh.
Price cuts to entice buyers are common. Nearly one-fourth of listings (24.5%) received a price cut in June, the highest rate for this time of year in Zillow records dating from 2018.
June 2024 Market Report
Home values
The typical home value in the U.S. in June was $362,482 – up 0.6% from last month and 3.2% higher than last year. That monthly growth is the lowest seen in any June since 2011. The typical monthly mortgage payment, assuming 20% down, was $1,918.
- Home values climbed month over month in 45 of the 50 largest metro areas in June. Gains were biggest in Buffalo (1.6%), Cleveland (1.6%), Pittsburgh (1.4%), Providence (1.3%) and Hartford (1.3%).
- Home values fell, on a monthly basis, in three major metro areas: Austin (-0.1%), Phoenix (-0.1%) and Tampa (-0.1%). Home values held steady in New Orleans and Denver.
- Home values are up from year-ago levels in 46 of the 50 largest metro areas. Annual price gains are highest in San Jose (12%), Hartford (10.5%), San Diego (9.4%), Providence (7.7%) and Los Angeles (7.6%).
- Home values are down from year-ago levels in four major metro areas: New Orleans (-6%), Austin (-4.6%), San Antonio (-2.7%), and Birmingham (-0.6%).
- The typical mortgage payment is up 6% from last year and has increased by 112.5% since pre-pandemic.
Inventory & new listings
- New listings decreased by 9.2% month over month in June.
- New listings decreased by 0.1% this month compared to last year.
- New listings are 25.6% lower than pre-pandemic levels.
- Total inventory (the number of listings active at any time during the month) in June increased by 4% from the previous month.
- There were 22.7% more listings active in June compared to last year.
- Inventory levels were 32.6% lower than pre-pandemic levels for the month – the smallest gap from pre-pandemic averages since November 2020.
Price cuts & share sold above list
- 24.5% of listings in June had a price cut, up from 23.8% the previous month. That’s the highest share of any June in Zillow data starting in 2018.
- 22.5% of listings had a price cut last June.
- 35.2% of homes sold above their list price in May. That is up 1.9 percentage points month over month.
- 40.5% homes sold above their list price last May.
Newly pending sales
- Newly pending sales decreased by 4.9% in June from the prior month.
- Newly pending sales decreased by 4.4% from last year.
- Median days to pending, the typical time since initial list date for homes that went under contract, was at 15 days in June, up two days since the previous month.
- Median days to pending increased by four days from last year.
Market heat index
- Zillow’s market heat index shows the nation is currently a sellers market.
- The strongest sellers markets in the country are Buffalo, Hartford, San Jose, San Francisco and Providence.
- The strongest buyers markets in the country are New Orleans, Miami, Austin, Jacksonville and Tampa.
