Inventory Hits Five-Year High, Price Cuts Surge

“The shift in many markets to a 'neutral' is significant, says Zillow Senior Economist Kara Ng. “Even if you're in a seller's market like the Northeast, it’s softer than before.”

“While negotiating power is more balanced, the affordability crisis remains a high barrier to entry, especially for first-time buyers,” says Ng. “Until we see a more meaningful improvement in purchasing power, this newfound balance will primarily benefit more well-off buyers."

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Sellers need to work harder  

Inventory was up again in June, at 1.36 million active listings (up 17.2% YoY). Listings that sell do so in 19 days — just one day faster than before the pandemic. That’s compared to 15 days in June of 2024 and 11 in June of 2023.

And as sellers vied for attention in June, price cuts hit 26.6% of listings — a high for the month dating back to 2018.

“Sellers may need to meet buyers partway,” Ng says. “Concessions like paying for a rate buy-down can raise the affordability ceiling that buyers are facing, because mortgage rates are unlikely to fall significantly.”

Frank pricing conversations with sellers may be essential. “If you’re used to hearing stories about neighbors selling for far above list price, today’s market realities may need a clearer introduction.”

Sellers can get a leg up on the competition with Zillow Showcase, which now includes SkyTour, a Zillow 3D offering that provides an immersive, drone-based virtual tour of a home’s exterior.

Affordability-challenged buyers need to get creative 

The easing of competition is in part due to the fact that many potential buyers are now priced out. Five years ago, a median-income household could have afforded a typical home with room to spare. Now, a median earner would need a $17,000 raise to afford a typical home. That’s assuming they have $73,000 saved to put 20% down.

For buyers on the cusp of affordability, it’s time to get creative. To make the finances work, more than half of buyers tap at least two sources for their down payment. Home listings on Zillow include information on down payment assistance, where available, to help shoppers see what local resources they may qualify for.

Affordability issues and slowing sales mean more homes are sitting longer — median time on market is now 54 days. For those lingering listings, “buyers have increasing power to negotiate assertively,” says Ng. “Agents can help them use that power wisely, leaning in on negotiation, seeking concessions, and challenging inflated prices.”