More Inventory, Lower Rates: Golden Opportunities for Homebuyers this Fall

Zillow’s Housing Market Report for August 2024 offers some encouraging news for buyers—with data every knowledge broker should be sharing, along with some helpful visuals to drive home the advantage. 

Earlier this week, we shared a Realtor.com report revealing the best week of 2024 for buying a home. And in yesterday’s Hot Sheet, Byron Lazine highlighted the biggest takeaways for agents working with buyers. More on that in a bit. 

Zillow’s market report doubles down on those findings with data confirming the opportunities for motivated buyers this fall. 

Late summer may be an opportunity for buyers who have been waiting in the wings for a monthly mortgage payment they can qualify for. Buyers have more options to choose from for two reasons. For one, it’s easier to qualify for more of the homes on the market now that mortgage rates are a bit lower. Beyond that, more inventory is becoming available — enough to improve buyer negotiating power. Attractive properties in hot markets are still selling quickly, but some metros — or neighborhoods within them — have flipped further in favor of buyers.

Skylar Olsen

Zillow Chief Economist

Buyers in your market need to know what’s going on locally as well as nationwide—what today’s lower mortgage rates mean for them as well as what the local market offers in terms of affordable housing supply and negotiating power. 

Read on for the highlights so you can prepare yourself for the conversations you’ll be having with buyers in the coming weeks. 

What buyers need to know

Obviously, if you’re in a market where buyers are still descending en masse on available listings, you might be having one or two conversations like this one: 

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But as mortgage rates continue to fall and inventory grows in many markets across the U.S., today’s buyers may be wondering if making a move now makes more sense than waiting for next spring. 

At 6.15% (as of September 12), mortgage rates are at their lowest since February 2023. And those lower rates mean substantial savings on the typical monthly mortgage payment. 

Also, buyers waiting until spring are more likely to face intense competition for available homes. 

What we know right now is that we’re at the lowest level in over a year and a half, and we know these things can change quickly in the environment that we’re in right now. But what I believe is a unique opportunity for you, consumers—and for buyers out there in particular—is to take advantage of not only this momentum in the 30-year fixed that we’re appreciating right now, but coupling that with the seasonality opportunity of negotiating a great deal. You have an opportunity to not follow the herd—to be the Warren Buffet of the buying community…

Byron Lazine

Catch Byron’s full breakdown of this fall’s golden opportunities for buyers in yesterday’s Hot Sheet. 

Read on for a quick overview of buyer-friendly market trends. 

#1: Housing Inventory

Zillow’s market report shows a 0.2% month-over-month increase in active listings for August 2024—22.1% more than we had in August of last year. 

Realtor.com’s report also pointed out that new listings are expected to decline in the coming months as sellers look forward to more buyer competition in the spring of 2025. So, with inventory at its highest since 2020, buyers have another reason to shop now rather than later.

#2: Home Values

The typical home value in the U.S. was $362,143 in August. That translates to a typical monthly mortgage payment of $1,827, assuming a 20% down payment, based on the monthly average for the 30-year fixed mortgage rate—a 3.4% drop from July’s monthly payment and a 2.9% drop from August 2023. 

For context, the typical mortgage payment is still up 103.8% from pre-pandemic. 

Nationwide, the drop in rates from July to August brought a $100 drop in the typical monthly mortgage payment—and a drop of over $300 a month for San Francisco homebuyers. 

That rate has since dropped to as low as 6.11% this week, with the Freddie Mac weekly average at 6.20% (reported on Thursday, September 5th). And while rates are expected to continue their downward trend, history has taught us it wouldn’t take much to get them climbing again. 

Meanwhile, home values have fallen, on a monthly basis, in 37 of the largest U.S. metros, with the biggest monthly declines in: 

1. San Francisco (-1.3%)
2. San Jose (-1.1%)
3. Austin (-1%)
4. Denver (-0.7%)
5. New Orleans (-0.6%)

Home values rose from the previous month in nine of the 50 largest metros, with the biggest increases in: 

1. Buffalo (0.7%)
2. New York (0.6%)
3. Providence (0.4%)
4. Hartford (0.3%)
5. Philadelphia (0.3%)

Year over year, home values rose in 44 of the 50 largest metros, with the biggest gains in:

1. San Jose (9.1%)
2. Hartford (8%)
3. Providence (7.1%)
4. New York (7%)
5. San Diego (6.2%)

Home values declined year over year in five major metros:

1. New Orleans (-4.6%)
2. Austin (-4.6%)
3. San Antonio (-2.9%)
4. Birmingham (-0.9%)
5. Dallas (-0.4%)

#3: Price Cuts & Share Sold Above List

In August, 25.9% of listings had a price cut—down a tick from 26.2% in July but still up from 23.4% in August of last year. 

Also, the share of listings that sold above the list price was 33.4% in July 2024, compared to 35.4% in June and 39.1% in July of 2023. 

Buyer’s Markets vs Seller’s Markets

Zillow’s Market Heat Index shows the national housing market is currently in neutral territory, having shifted from a seller’s market in July. 

That said, sellers still have a strong advantage in several major markets, especially these five, where inventory is still relatively low:

1. Buffalo, NY
2. Hartford, CT
3. San Jose, CA
4. Boston, MA
5. New York, NY

The strongest buyer’s markets as of August 2024—largely due to relatively speedy growth in housing supply:

1. New Orleans
2. Miami
3. Jacksonville
4. Austin
5. Tampa

The point is we are entering the best three or four months of a buying season than we’ve seen in—and I would agree with Danielle Hale, here—in years… 

I’m using this as a headline-grabber, as a hook, to have a deeper conversation about how important it is to be active and what you can do to negotiate in this season versus other seasons. And you’re not having to be a predictor…you can just go ahead and use those headlines to really grab attention and to further educate consumers

Byron Lazine

Read the full report on Zillow for more information, including additional charts and methodology.