Is this the break homebuyers have been waiting for?
The US housing market is experiencing its highest inventory level in more than five years, according to Zillow’s latest market report. The increase in available homes, coupled with a surge in price reductions, has shifted market conditions closer to balance, giving buyers more options and leverage after years of tight supply and seller dominance.
Zillow reported that 1.36 million homes were listed for sale in June—a 17.2% increase from a year earlier and the highest level since November 2019. The growth in listings comes as more homeowners return to the market and new construction remains strong.
However, inventory remains about 21% below typical June levels seen before the pandemic. Zillow forecasted that the gap could continue to shrink, potentially returning to pre-pandemic norms by the end of 2025.
Market balance expands across major metros
The market now favors buyers in 28 of the nation’s 50 largest metropolitan areas. That figure has nearly doubled from 15 metros in May and reflects a significant increase from just eight neutral markets one year ago.
“The shift to a ‘neutral’ market is significant, but it shouldn’t be mistaken for a universally cool or easy market for buyers,” said Kara Ng, Zillow senior economist. “While negotiating power is more balanced, the affordability crisis remains a high barrier to entry, especially for first-time buyers. Until we see a more meaningful improvement in purchasing power, this newfound balance will primarily benefit more well-off buyers.”
Price cuts surge to record levels
In June, 26.6% of home listings featured a price cut—the highest June figure since Zillow began tracking the metric in 2018. The share is approaching the all-time high of 27% recorded in September 2022.
Price reductions were most frequent in regions that saw sharp price appreciation during the pandemic. Denver led with 38.3% of listings cutting prices, followed by Raleigh (36.4%), Dallas (35.5%), Phoenix (35.5%), and Nashville (35.5%).
Sales slow, buyers take more time
Though buyers now have more choices, sales activity slowed in June. Pending home sales dipped 4.9% from May, following typical seasonal patterns, although they were slightly ahead of June 2024 figures.
Homes are also staying on the market longer. The median time to pending sale was 19 days, compared with 15 days in June 2024 and 11 days in June 2023. However, this remains slightly faster than the pre-pandemic norm.
Affordability still a key challenge
Despite the easing of market competition, affordability remains a significant obstacle. Home values have largely stalled, and mortgage costs have fallen only marginally from a year ago. These factors continue to limit access to homeownership, particularly for first-time buyers.
Regional trends highlight shifting dynamics
- Buyer-friendly markets include Miami, Atlanta, Tampa, Austin, and Jacksonville.
- Major metros with neutral conditions include Dallas, Phoenix, San Diego, and Denver.
- Traditional seller-favored markets such as New York, Chicago, Boston, and Washington, D.C., remain largely unchanged.
Outlook
Zillow’s findings suggest a market slowly returning to balance after years of extreme seller advantage. Buyers now enjoy greater negotiating power, more inventory, and longer decision-making periods. Yet, affordability concerns—driven by high home prices and borrowing costs—continue to challenge broad market access.
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