Homeowners list while buyers hang back, pushing inventory higher

SEATTLE, June 12, 2024

• Homeowners are breaking free from rate lock — new listings rose nearly 13% since last year.
• Inventory is accumulating, rising 22% over last year and reducing the pandemic-era deficit.
• Home value appreciation slowed in May, and forecast points to prices easing over the next year.

SEATTLE, June 12, 2024 /PRNewswire/ -- Home sellers are returning to the market, but they're finding buyers hesitating, according to the latest Zillow® market report.¹ New listings of houses outpaced sales in May, allowing buyer competition and price growth to cool — and further price relief is in the forecast.

"Rate lock's hold seems to be loosening — homeowners who may have put off listing their homes are done waiting. But just as more choices sprang up for sale, buyers turned on cruise control," said Orphe Divounguy, Zillow senior economist. "Inflation has hit younger households hardest, and stubbornly high rates have pushed a mortgage out of reach for many first-time buyers. That has cooled competition for houses. If these trends hold, we're likely to see price growth flatten or tick down over the next year."

Inventory infusion
New listings from sellers took a larger-than-average step up, rising 8% from April to May, and now stands 13% above last year's extremely low level. The effects of "rate lock" — when owners hold onto their existing homes and low-rate mortgages — are weakening over time. A Zillow survey of recent sellers found a large majority (about 80%) were influenced by life events, such as getting married or having a child, and not necessarily by optimal financial conditions. 

But buyers aren't matching sellers' enthusiasm; sales in May were 6% lower than last year.² This helped partially restock the housing shelves, with the number of homes on the market rising 22% compared to last year's near record-low level. Inventory is still 34% below pre-pandemic norms, but that's the smallest deficit in more than three years. 

New listings rose the most annually on the West Coast and coastal South, in San Diego, Seattle, Charlotte, Raleigh and the San Francisco Bay Area. Compared to last year, total inventory accumulated the most in major Florida markets, where strong new construction has helped refill the coffers. Buyers saw more listings month over month in every major market except Miami.