As buyer demand cools, sellers are putting off listing their homes because they do not want to cut prices.
A new analysis from Zillow found that 1.36 million homes were for sale in June, the most since November 2019. And 28 of the 50 largest U.S. metros are now balanced or favor buyers.
Affordability is still restraining demand, however, leading to the lowest competition among buyers than in any June in Zillow’s records, which date back to 2018. In eleven major cities, the typical buyer needs a $50,000 raise to afford a home. In others, it’s even more.
“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.”
Inventory is still down about 21% from pre-pandemic levels, and sellers are facing tough choices as price appreciation continues to cool, especially in former pandemic boomtowns that have turned sluggish in recent years.
Some sellers are removing their listings as their price expectations fall short of what buyers are willing to spend. Many are even opting to rent rather than sell, according to new data from Redfin.
“Prospective sellers are feeling discouraged by this new reality. Some are reacting by staying put or renting their homes out instead of selling — especially if they’re at risk of taking a haircut,” Redfin Senior Economist Asad Khan commented.
But homeowners who need to move are cutting prices, with June seeing a record-high number of listing price drops at 26.6%.
