Nearly 1 in 4 sellers cut home prices as inventory grows
Rhea-AI Summary
Zillow's latest monthly report reveals a shifting housing market as buyers step back from the peak shopping season. Key findings include:
1. Inventory is growing, up 4% from May to June and 23% above last year's levels.
2. Nearly 1 in 4 sellers (24.5%) cut home prices in June, the highest rate for this time of year since 2018.
3. Home value growth has slowed to 3.2% annually, down from a 2024 peak of 4.6% in March.
4. Affordability remains a challenge, with new mortgages affordable in only 11 of 50 major markets.
5. Competition is easing, especially in Southern markets, with homes typically on the market for 15 days before an offer is accepted.
These trends suggest a market shifting towards more balance between buyers and sellers, though affordability issues persist.
Positive
- Inventory rose 4% from May to June, standing 23% above last year's levels
- Home value appreciation slowed to 3.2% annually, potentially giving buyers a chance to catch up
- Competition is easing, with homes typically on the market for 15 days before an offer is accepted
- Zillow forecasts home values to rise just 1% nationally through June 2025
Negative
- Nearly 1 in 4 sellers (24.5%) had to cut home prices in June, indicating reduced buyer demand
- New mortgages are affordable in only 11 of 50 major markets, highlighting persistent affordability challenges
- Zillow's Sales Nowcast in June decreased 9% from May, with sales 35% lower than pre-pandemic norms
- Inventory levels are still about 33% below pre-pandemic averages
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AI-generated analysis. How Rhea-AI works. Not financial advice.
Competition is fading fast after the peak of this year's affordability-challenged home shopping season
- Monthly home value growth, while still positive, hit a 14-year low for June as competition relaxes.
- Inventory rose in all but five major metros while the nationwide deficit continues to shrink.
- Affordability challenges persist — new mortgages are affordable in just 11 of 50 major markets.
"A growing segment of homes that aren't competitively priced or well marketed are lingering on the market. Sellers are increasingly cutting prices to entice buyers struggling with affordability," said Skylar Olsen, chief economist of Zillow. "For years, the housing market has been defined by fast sales and few options. Now it's starting to look more like it did before the pandemic in terms of competition, if not costs. As the wait for mortgage rate relief drags on, slower price growth and even dips in some areas will help buyers catch up on saving for a down payment."
Inventory slowly recovers
The total number of homes on the market has risen throughout the year, ticking up
Inventory is higher than last year in all of the 50 largest
Attractive listings are selling relatively quickly. But buyers still in the market are enjoying a few more days to weigh their choices than they had last summer. Homes sold in June were typically on the market for 15 days before the seller accepted an offer. That's five days shorter than pre-pandemic norms, the smallest difference since June 2020.
High costs weigh on buyers
While mortgage rates have eased from May peaks, buyers are still contending with costs that have risen far faster than wages. A median-income household can afford mortgage payments when buying a typical home in just 11 of 50 major markets, even when putting
With many buyers pushed to the sidelines by costs, Zillow's Sales Nowcast in June took a
Slowing appreciation could give buyers a break
Home value growth has slowed as inventory rises. Annual appreciation is a reasonable
Slower home value growth in the months ahead could give struggling buyers a chance to make up ground. Zillow forecasts home values to rise just
Cooling competition brings price cuts
While sellers still have a slight edge nationally, Zillow's market heat index shows a balanced market may be just over the horizon. Competition is easing fastest in the South; all major Southern markets are either neutral or buyer-friendly, with the exception of
Sellers are cutting prices more often to entice buyers. Nearly one-quarter of listings (
It can be tricky to keep up with rapidly changing list prices and mortgage rates. Zillow's new BuyAbility tool uses up-to-date mortgage rates to show home shoppers price ranges and monthly payments they personally could afford, and whether they're likely to be approved for a loan. Shoppers can make sure all their results on Zillow stay within a set monthly budget by using the search by monthly cost filter.
Metropolitan | June Zillow | ZHVI | ZHVI | Market | Share of | Inventory | New |
0.6 % | 46.1 % | Seller's | 24.5 % | 22.7 % | -25.6 % | ||
1.0 % | 32.9 % | Strong | 14.2 % | -2.6 % | -39.0 % | ||
| 0.5 % | 43.5 % | Strong | 18.5 % | 26.1 % | -26.2 % | |
1.1 % | 37.2 % | Seller's | 22.2 % | 3.0 % | -31.7 % | ||
0.2 % | 47.1 % | Seller's | 35.2 % | 34.7 % | -17.3 % | ||
0.3 % | 39.0 % | Neutral | 30.2 % | 26.4 % | -11.7 % | ||
| 0.3 % | 31.1 % | Strong | 21.1 % | 15.5 % | -27.4 % | |
| 0.8 % | 44.9 % | Seller's | 20.9 % | 7.3 % | -28.8 % | |
0.1 % | 62.2 % | Buyer's | 22.7 % | 47.9 % | -10.7 % | ||
0.3 % | 56.9 % | Neutral | 29.5 % | 38.4 % | -23.4 % | ||
0.8 % | 43.7 % | Strong | 18.9 % | 17.4 % | -30.7 % | ||
-0.1 % | 52.9 % | Neutral | 33.8 % | 17.7 % | -28.5 % | ||
San | 0.1 % | 25.6 % | Strong | 19.0 % | 30.0 % | -20.9 % | |
0.5 % | 52.8 % | Seller's | 22.5 % | 27.7 % | -30.6 % | ||
1.0 % | 41.8 % | Seller's | 21.0 % | 11.5 % | -30.4 % | ||
0.2 % | 45.1 % | Seller's | 25.2 % | 30.4 % | -27.8 % | ||
| 0.5 % | 28.0 % | Strong | 22.7 % | 12.8 % | -34.4 % | |
0.2 % | 57.1 % | Seller's | 24.5 % | 41.6 % | -29.6 % | ||
-0.1 % | 61.7 % | Buyer's | 34.7 % | 71.1 % | -13.5 % | ||
0.0 % | 36.1 % | Seller's | 34.8 % | 30.1 % | -22.3 % | ||
| 0.3 % | 31.7 % | Seller's | 23.1 % | 14.4 % | -27.0 % | |
1.0 % | 41.6 % | Strong | 20.6 % | 14.5 % | -27.1 % | ||
0.1 % | 54.7 % | Neutral | 29.4 % | 59.8 % | -13.3 % | ||
0.3 % | 59.7 % | Neutral | 24.8 % | 34.3 % | -18.2 % | ||
| 0.1 % | 34.9 % | Neutral | 31.7 % | 28.0 % | -10.1 % | |
0.2 % | 32.7 % | Seller's | 26.7 % | 19.0 % | -31.2 % | ||
| 0.2 % | 34.8 % | Seller's | 26.5 % | 19.9 % | -34.8 % | |
| 1.4 % | 35.2 % | Seller's | 25.5 % | 8.4 % | -25.8 % | |
| 1.0 % | 49.0 % | Seller's | 24.6 % | 12.6 % | -23.2 % | |
-0.1 % | 42.2 % | Buyer's | 31.5 % | 14.5 % | -9.7 % | ||
0.6 % | 45.3 % | Seller's | 24.6 % | 9.5 % | -31.6 % | ||
| 0.7 % | 46.9 % | Seller's | 26.3 % | 21.1 % | -34.6 % | |
| 0.7 % | 50.8 % | Seller's | 27.1 % | 19.5 % | -22.8 % | |
| 0.7 % | 51.8 % | Seller's | 30.3 % | 14.2 % | -23.3 % | |
| 1.6 % | 48.7 % | Strong | 20.2 % | -0.2 % | -28.6 % | |
0.6 % | 42.6 % | Strong | 15.7 % | 39.0 % | -15.8 % | ||
0.3 % | 49.2 % | Neutral | 33.6 % | 23.2 % | -12.3 % | ||
| 0.6 % | 41.9 % | Seller's | 20.7 % | 18.8 % | -29.2 % | |
| 1.3 % | 53.6 % | Strong | 17.3 % | 18.1 % | -39.8 % | |
| 0.1 % | 52.5 % | Buyer's | 31.9 % | 48.4 % | -9.6 % | |
| 1.3 % | 44.2 % | Strong | 12.9 % | 6.3 % | -14.6 % | |
| 0.5 % | 43.5 % | Neutral | 30.1 % | 21.9 % | -12.1 % | |
0.3 % | 53.8 % | Seller's | 32.1 % | 32.2 % | -22.0 % | ||
0.4 % | 47.1 % | Buyer's | 26.7 % | 29.2 % | -7.1 % | ||
| 0.7 % | 48.0 % | Strong | 20.9 % | 20.4 % | -29.5 % | |
0.7 % | 38.0 % | Seller's | 25.3 % | 23.5 % | -22.5 % | ||
| 0.0 % | 4.9 % | Buyer's | 26.9 % | 5.1 % | -2.9 % | |
| 0.2 % | 46.6 % | Seller's | 34.2 % | 14.8 % | -32.0 % | |
1.3 % | 58.2 % | Strong | 14.7 % | 5.3 % | -41.1 % | ||
1.6 % | 53.8 % | Strong | 16.6 % | 5.2 % | -22.2 % | ||
| 0.3 % | 38.0 % | Neutral | 23.9 % | 16.7 % | -21.9 % |
*Table ordered by market size |
**According to Zillow's market heat index |
1 The Zillow® Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research. |
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