SANTA CLARA, CA — According to Realtor.com®’s July housing data, the U.S. housing market is becoming increasingly favorable for buyers. Rising inventory levels and a surge in price cuts have marked a significant shift in the market dynamics.
Homes actively for sale grew by 36.6% in July 2024 compared to the same period last year. This increase hit a post-pandemic high, while the share of listings with price reductions climbed to 18.9%, the highest rate since October.
“The inventory scars of the pandemic-era housing market are continuing to fade,” said Danielle Hale, Chief Economist of Realtor.com®. “Although active listings are still short of the pre-pandemic mark, we saw the gap continue to narrow meaningfully as active listings hit a post-pandemic high. As sellers continue to list homes and buyers become choosier, the time a home spends on the market is extending, thereby helping the housing market move in a more buyer-friendly direction. In response, sellers are curbing expectations and reducing listing prices more often which could set the stage for more sales this fall, especially if mortgage rates continue to decline.”
Inventory Hits Post-Pandemic High
July saw growth in inventory across all regions. Nationwide, the total number of homes for sale increased by 22.6%, marking the ninth consecutive month of growth and surpassing last month’s rate of 22.4%. While inventory is still below pre-pandemic levels, the gap is shrinking. The South and the West experienced the most gains, with listings growing by 47.6% and 35.4%, respectively. The South’s inventory is now just 14% below pre-pandemic levels, while the West’s sits 19.4% below.
“In addition to seeing inventory levels rise to heights not seen since before the pandemic, buyers are also seeing sellers cut prices on a much larger share of homes than last year,” said Realtor.com® Senior Economist Ralph McLaughlin. “These are signs that the housing market is healing from an unhealthy state and becoming more balanced.”
Sellers Warm Up to Listing Homes and Cutting Prices
With a recent decrease in mortgage rates, more sellers are entering the market. The share of listings with price cuts increased to 18.9%, the highest since last October. Every one of the top 50 metros saw an increase in price cuts year-over-year, with Denver, Austin, and Tampa leading the way at 32.4%, 31.4%, and 30.6%, respectively. Newly listed homes on the market also grew by 3.6% compared to last year, though this was lower than the 6.6% growth seen in June 2024.
Homes Linger on Market Longer
As inventory rises, homes are spending more time on the market. The typical home spent 50 days on the market in July, the fourth consecutive month where this duration exceeded that of the previous year. This gives buyers more time to make decisions. Although homes are spending five more days on the market than in July 2023, they are still being sold more than a week faster than in the same month from 2017-2019.
This shift in the housing market dynamics suggests a move towards a more balanced environment, providing opportunities for both buyers and sellers.
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