• 📉 Nearly 1 in 4 sellers reduced home prices as competition declines.
  • 🏠 Home value growth hit a 14-year low in June 2024.
  • 🏡 Inventory levels increased in almost all major U.S. metros.
  • 💸 New mortgages are affordable in only 11 out of 50 major markets.
  • 📅 Homes sold in June 2024 were on the market for an average of 15 days.
  • 🌆 Inventory levels remain 33% below pre-pandemic averages.
  • 📉 Zillow’s Sales Nowcast showed a 9% decrease in June sales from May.
  • 🔮 Zillow forecasts just a 1% home value increase through June 2025.
  • 💰 24.5% of listings received price cuts in June 2024, the highest rate since 2018.

The housing market in the United States has experienced significant shifts in June 2024. From home value growth hitting a record low to an increase in inventory, prospective homeowners and sellers alike need to understand these trends to navigate today’s real estate landscape successfully. This blog post delves into the latest data and what it means for buyers, sellers, and investors.

An Overview of the Current Housing Market

In June 2024, the U.S. housing market saw substantial changes that are reshaping the way buyers and sellers approach real estate transactions. Here are the key highlights:

  1. Price Reductions: Nearly one in four sellers cut their home prices as the competition in the market declines.
  2. Home Value Growth: Home value growth hit a 14-year low, signaling a significant slowing down of price increases.
  3. Inventory Levels: Inventory levels have increased in almost all major U.S. metropolitan areas.
  4. Mortgage Affordability: New mortgages continue to be affordable in only 11 out of 50 major markets.
  5. Days on Market: Homes sold in June were on the market for an average of 15 days.
  6. Inventory Comparison: Although inventory has increased, it remains 33% below pre-pandemic levels.
  7. Zillow’s Sales Nowcast: June sales saw a 9% decrease from May, indicating a slowdown in buyer activity.
  8. Forecast: Zillow forecasts a modest 1% increase in home values through June 2025.
  9. Listing Price Cuts: A notable 24.5% of listings received price cuts in June—the highest rate since 2018.

Home Value Trends: A Closer Look

The Slowdown in Home Value Growth

In June 2024, home value growth reached its lowest point in 14 years. The slowdown is evident as home values only increased by an average of 0.6% over the month, making this the slowest appreciation since 2011.

  • Why the Slowdown? Various factors contribute to this trend, including rising mortgage rates, broader economic uncertainty, and the shifting balance of supply and demand.
  • Impact on Buyers and Sellers: For buyers, slowing price growth offers a breather, potentially making it easier to save for a down payment. For sellers, the market may no longer guarantee quick, high-profit sales.

Inventory Levels: An Unprecedented Rise

A 23% Increase in Inventory

The total number of homes on the market ticked up by 4% from May to June, standing nearly 23% above last year’s low level. However, despite this increase, inventory levels are still lower than pre-pandemic averages by about 33%, marking the smallest deficit since the fall of 2020.

  • Metro Area Performance: Inventory rose in all the 50 largest U.S. metropolitan areas except two—New York and Cleveland.
  • Days on Market: Attractive listings are selling relatively quickly, but buyers still enjoy more time to make decisions compared to last summer.

The Dark Side: Affordability Challenges

Mortgage Affordability Woes

Despite the increased inventory and slower price growth, affordability remains a significant challenge. New mortgages are considered affordable in only 11 of 50 major markets. High mortgage rates and stagnant wages make it tough for many buyers to secure financing.

  • Impact on Sales: Affordability challenges have pushed many prospective buyers to the sidelines, contributing to a 9% decrease in home sales from May and a 35% drop compared to pre-pandemic norms.
  • Zillow’s BuyAbility Tool: To navigate this challenging environment, Zillow’s new BuyAbility tool aims to help buyers understand price ranges and monthly payments they can afford.

What Lies Ahead: Forecast and Future Trends

Zillow’s Modest Forecast

Zillow forecasts a modest 1% increase in home values through June 2025. This slow growth could provide struggling buyers more time to save and re-enter the market.

  • Long-Term Outlook: Competition is cooling fastest in Southern markets, where most areas are becoming neutral or buyer-friendly, except Dallas and Raleigh.

Final Thoughts: Strategic Moves for Buyers and Sellers

Understanding the current state of the housing market is crucial for making informed decisions.

  • For Buyers: Utilize tools like Zillow’s BuyAbility and keep an eye on listings that receive price cuts.
  • For Sellers: Price competitively and market effectively to attract buyers in an increasingly cautious market.

The housing market of June 2024 presents a mixed bag of opportunities and challenges. Whether you’re buying, selling, or investing, staying informed and adaptable will be essential for navigating these changing tides.

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Last Update: July 17, 2024