An expected end-of-summer slowdown in the housing market came with a pleasant surprise for home shoppers in August. The latest market report1 from Zillow® shows an uptick of new listings. Although sellers are still listing fewer houses than pre-pandemic norms, the monthly increase gave buyers a bit of relief in the midst of a long-standing drought of inventory.
“Those still shopping for homes late in summer were offered a bit of relief, and not all from expected sources. 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.”
Sellers listed nearly 350,000 homes for sale across the U.S. in August, about 4% more than in July. Although the number of new listings are more than 20% below pre-pandemic norms, the uptick gave shoppers a few fresh choices at a time of year when the flow of inventory is typically drying up; new listings have contracted every August in Zillow data going back to 2018. The slight upward bump helped to halve an annual deficit in new listings, from -26% year over year in July to -13% in August.
Homeowners who bought or refinanced to ultra-low mortgage rates in 2020 or 2021 have been loath to sell, which has kept new listings at seasonal record lows (with the exception of April 2020) for 14 straight months. Total inventory also ticked up in August, rising 2.2% from July. However, inventory levels are still about 42% below that of August 2019.
Heading into fall, shoppers can generally expect more modest price growth and less competition compared to the peak seasons of spring and early summer — and that’s what Zillow data is showing.
The typical U.S. home value climbed 0.2% from July to August — a marked cooldown after red-hot monthly appreciation in the spring and early summer. The nation’s typical home value has reached another all-time high at $351,423, and stands 1.3% higher than last August.
Home values climbed 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, most notably in New Orleans, Austin, San Antonio, Denver and Dallas.
As is usually the case at this time of year, price cuts on listings are becoming more and more common by the month, 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.
Sales activity decreased as well: There were 19% fewer newly pending listings in August than last year, compared to a roughly 15% year-over-year dip in July.
Mortgage rates are still volatile as financial markets respond to new economic data and comments from the Federal Reserve. Regardless of rate movements, home shoppers on Zillow can make sure their results stay within their budget by using an affordability calculator and searching by a range of monthly payments that work for them.
