Key Details:
- Zillow’s latest report shows new listings fell 7.3% in August, hitting a record low for the month.
- Total inventory is 15% higher than a year ago, but supply slipped 1.3% from July’s peak as homeowners held on to equity gains.
- Homes took a median of 27 days to sell, while price cuts eased to 26% of listings.
The brakes are on. According to Zillow’s latest housing market report, new listings dropped 7.3% month-over-month in August, hitting a record low for that month in Zillow’s records.
Inventory is still 15% higher than a year ago, but supply shrank 1.3% from July’s peak as sellers decided to wait things out.
Kara Ng, Senior Economist at Zillow, put it this way:
“Buyers who can afford a home and have been waiting for the right moment should look closely at what’s available now. Options are on the shelves, even if they’re not all fresh.
“Sidelined buyers should revisit their budget; mortgage rates are lower than recent years, and in some markets, sellers are more willing to deal. But don’t expect this window of opportunity to stay open indefinitely. Buyers’ leverage is easing as many sellers put their plans to list on hold.”
Price Cuts, Pace, and Market Heat
One of the strongest signals of cooling momentum is the price cut trend. After hitting an all-time high of 27% of listings in July, the share of homes with a price reduction eased slightly to 26% in August.
At the same time, Zillow’s market heat index shows the market is more balanced than it has been in years. Buyer competition is lower than in any August since 2018, thanks to affordability pressures keeping many would-be buyers on the sidelines.
That cooling demand is showing up in the sales timeline. The typical home sold in 27 days in August, a week longer than last year, and even one day slower than the pre-pandemic norm.
Sellers Stay Put
With higher borrowing costs and equity-rich positions, many homeowners are in no rush to sell. Since February 2020, typical home values are up 46.5% nationwide. That cushion, along with low locked-in mortgage rates, gives owners little incentive to list.
New listings fell 7.3% from July, marking the sharpest August decline in Zillow’s history. That slowdown, combined with flat demand, caused total for-sale inventory to slip 1.3% from July’s peak.
A Zillow survey of recent sellers found that 37% put their home on the market because of a new job. With the labor market softening, even that driver could weaken, further limiting supply.
Home Values Flatlining
Zillow’s Home Value Index shows annual home value appreciation is flat, tied for the second-slowest growth rate since early 2018.
For buyers still in the market, this pause in price growth creates a window of opportunity. But the same data shows that the advantage may not last, since fewer homes are being listed and supply is starting to tighten.
Regional Divides
National averages mask stark local differences.
Buyer-friendly markets:
- Miami, Tampa, Jacksonville, Austin — Each now has more inventory available than before the pandemic, thanks in part to builders adding supply.
- Seattle — Shifted from a seller’s market to a buyer’s market, with inventory up 22% year-over-year.
Seller-friendly markets:
- Buffalo, Hartford, San Francisco, San Jose, Boston — All remain highly competitive, with inventory still well below pre-pandemic averages.
- The Northeast and the San Francisco Bay Area remain firmly tilted in favor of sellers, where constrained supply continues to drive competition.
For now, buyers with the budget and patience have real opportunities to negotiate. But with new listings at a record low for August and fewer sellers willing to enter the market, that window could narrow quickly.
