Zillow has officially published its latest monthly report, which revealed that home listings are piling up again as buyers step back from the peak of home shopping season, doing so faster than normal. According to certain reports, the report digs into how 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. Now, while inventory levels are still about 33% below pre-pandemic averages, it is now the smallest deficit since the fall of 2020, when the pool of available homes was quickly dropping. More on the report would educate us how attractive listings are selling relatively quickly, but having said so; buyers are still able to get a few more days to make their choice, with homes sold in June staying on the market for an average of 15 days before the seller accepted an offer. This translated to five days shorter than pre-pandemic norms, again the smallest difference since June 2020. Moving on, even though mortgage rates have eased from May peaks, the report claims that buyers are still contending with costs which, on their part, have have risen far faster than wages. This is because, going by the available details, a median-income household can afford mortgage payments when buying a typical home in just 11 of 50 major markets, even when putting 20% down. Keeping that in mind, Zillow’s Sales forecast in June took a 9% step down from May; a drop conceived as a response against sales contracting by 35%, compared to pre-pandemic norms.
Another detail worth a mention here is rooted in the fact that annual home appreciation is currently a reasonable 3.2% nationally, down from a 2024 peak of 4.6% in March. Furthermore, monthly growth has decelerated to 0.6%, the slowest June appreciation since 2011. Even for the near future at least, Zillow forecasts home values to rise just 1% nationally through June 2025. Among other things, the report revealed that, despite sellers having slight edge nationally, Zillow’s market heat index shows a balanced market may be just over the horizon. It backed the stated claim by showcasing how competition is actually easing fastest in the South; all major Southern markets being either neutral or buyer-friendly, with the exception of Dallas and Raleigh. Almost like a cause to emerge from this is a flurry of price cuts. To put it in simple terms, nearly one-quarter of listings (24.5%) received a price cut in June, the highest rate for this time of year in Zillow records.
As for the method Zillow used to reach upon its findings, it leveraged its brand-new BuyAbility tool to access up-to-date mortgage rates, as well as show home shoppers price ranges and monthly payments they personally could afford, and whether they’re likely to be approved for a loan.
“A growing segment of homes that aren’t competitively priced or well marketed are lingering on the market. Sellers are increasingly cutting prices to entice buyers struggling with affordability,” said Skylar Olsen, chief economist of Zillow. “For years, the housing market has been defined by fast sales and few options. Now it’s starting to look more like it did before the pandemic in terms of competition, if not costs. As the wait for mortgage rate relief drags on, slower price growth and even dips in some areas will help buyers catch up on saving for a down payment.”
