In more signs the market may be normalizing, Realtor.com’s latest housing report shows inventory levels rising to a post-pandemic high, along with price cuts reaching their highest rate since October of last year.
According to Realtor.com®’s July Monthly Housing Market Trends Report, the market is becoming more buyer friendly with homes actively for sale growing 36.6% in July 2024 relative to the same time last year, and price cuts reaching 18.9%.
“The inventory scars of the pandemic-era housing market are continuing to fade,” said Danielle Hale, chief economist of Realtor.com® “Although active listings are still short of the pre-pandemic mark, we saw the gap continue to narrow meaningfully as active listings hit a post-pandemic high. As sellers continue to list homes and buyers become choosier, the time a home spends on the market is extending, thereby helping the housing market move in a more buyer-friendly direction. In response, sellers are curbing expectations and reducing listing prices more often which could set the stage for more sales this fall, especially if mortgage rates continue to decline.”
Inventory hits post-pandemic high
The report showed inventory growing across the country, with all four regions seeing active inventory grow year-over-year. Nationwide the total number of homes for sale increased by 22.6%, growing for the ninth-straight month and surpassing last month’s rate of 22.4%, according to the report.
While inventory still sits below pre-pandemic levels, the gap between the 2017-2019 and present day levels is getting smaller, Realtor.com reported. In particular, the South and the West experienced the most gains, with a growth in listings of 47.6% and 35.4%, respectively. The two regions are also closing the pre-pandemic and present day gap in inventory the most, with the South’s inventory hovering 14% below pre-pandemic levels, while the West’s inventory sits at 19.4% below. There is still a sizable difference in the gaps that need to be closed in the Midwest and the Northeast, where inventory still sits below pre-pandemic levels by 46.8% and 55.5%, respectively, the report detailed.
“In addition to seeing inventory levels rise to heights not seen since before the pandemic, buyers are also seeing sellers cut prices on a much larger share of homes than last year,” said Realtor.com® Senior Economist Ralph McLaughlin. “These are signs that the housing market is healing from an unhealthy state and becoming more balanced.”
With the recent decrease in mortgage rates, more sellers are getting into the market and have seemingly open minds as the share of listings with price cuts increased to 18.9%, the highest since October of last year. While all 50 of the top metros saw share of listings with price cuts increase year-over-year, the metros that saw the most include Denver (32.4%), Austin (31.4%), and Tampa (30.6%), according to the report.
Additionally, newly listed homes on the market grew by 3.6% this month compared with the same time last year, but measurably lower than June 2024’s 6.6% figure. This marks the ninth consecutive month of an increased number of newly listed homes, leading to more options and availability of homes for those who are eager to buy, Realtor.com stated.
While options for homes are on the rise, the time homes are spending on the market is also growing, according to the report. This month, the typical home spent 50 days on the market, which is the fourth month in a row where time spent on market is more than it was during the previous year, meaning buyers have more of an opportunity to scoop up a home they’ve been eyeing than in previous months. That being said, while it’s five more days than the time the typical home spent on the market in July 2023, it’s still more than a week (8 days) less than the time spent in July from 2017-2019, the report stated.
To view the full report, see the Realtor.com® July Monthly Housing Report.
