Zillow Analysis: Late-Summer Slowdown Brings More Options for Homebuyers

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The housing market’s expected end-of-summer slowdown arrived with a pleasant surprise for home shoppers. According to the latest market report from Zillow®, August saw an uptick in new listings, offering a slight respite amid an ongoing inventory shortage.

New listings increased by 4% in August, providing buyers with more choices. Despite this increase, the number of new listings remains over 20% below pre-pandemic norms. However, the rise in listings offered some relief to buyers during a period when inventory typically contracts.

“Competition for houses tends to ease up at this time of year, giving buyers more time to decide and a better chance to negotiate on price,” said Jeff Tucker, Zillow senior economist. “What we didn’t expect — especially considering 7-plus-percent mortgage rates — was more new listings. The inventory crunch is still far from resolved, but this was a small step in the right direction.”

Despite the seasonal increase, total inventory remained low, rising 2.2% from July but still about 42% below levels recorded in August 2019.

The typical U.S. home value climbed 0.2% from July to August — a significant slowdown after months of rapid appreciation in the spring and early summer. The nation’s typical home value has reached another all-time high at $351,423, standing 1.3% higher than last August.

Home values increased month-over-month in 32 of the 50 largest metro areas in August, led by Hartford, Buffalo, San Diego, Cleveland, and Providence. Values fell from July to August in 12 major metro areas, including New Orleans, Austin, San Antonio, Denver, and Dallas.

As expected for this time of year, price cuts on listings are becoming more common, and buyers are getting a bit more time to decide on a house. Listings in August took a median of 13 days to go pending — one day longer than in July.

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Sales activity also decreased, with 19% fewer newly pending listings in August than last year, compared to a roughly 15% year-over-year dip in July.

Despite the volatility of mortgage rates as financial markets respond to new economic data and comments from the Federal Reserve, Zillow suggests home shoppers can ensure their results stay within their budget by using an affordability calculator and searching by a range of monthly payments that work for them.

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