The real estate market is seeing a significant increase in homeowners listing their properties for sale, according to the latest report by Zillow. New listings have spiked by 13% compared to the previous year, indicating a growing interest in selling. However, despite the surge in listings, properties are taking longer to sell, as potential buyers are facing high prices and interest rates. As a result, the number of homes on the market has risen by 22% from last year, contributing to an accumulation of inventory.
With buyers not returning to the market at the same pace as sellers, many new listings are struggling to find interested buyers. As a consequence, homes are staying on the market for a longer period, with almost two-thirds of properties listed for at least 30 days without securing a contract. Additionally, 40.1% of homes listed have been on the market for two months without being sold. This slowdown in the market has allowed inventory to accumulate, creating a challenging environment for sellers.
Despite the recent increase in supply, the housing inventory in the U.S. remains 34% below pre-pandemic levels. According to Zillow, there is a shortage of approximately 4.3 million homes nationwide, leading to an inventory deficit in the housing market. This shortage, coupled with high mortgage rates and strained affordability, has made it difficult for buyers to enter the market, resulting in properties lingering for extended periods without being sold.
The high mortgage rates in the market have deterred buyers from making purchases, as they struggle with affordability and financial constraints. With the 30-year fixed-rate mortgage at 6.95%, buyers are facing challenges in securing favorable financing for home purchases. The uncertainty surrounding mortgage rate movements has also led to hesitancy among potential buyers, as they are unsure of when rates might drop, making it difficult to plan their homebuying decisions.
Certain markets in the U.S. are experiencing a significant increase in unsold inventory, with properties staying on the market for extended periods. In areas such as Dallas, Fort Lauderdale, Tampa, and Jacksonville, the share of unsold listings that have been on the market for at least 30 days has increased compared to the previous year. This surplus of inventory has given buyers more bargaining power, allowing them to potentially secure properties below their listed prices.
For home sellers in areas with high levels of unsold listings, it may be necessary to consider price cuts to generate interest and facilitate sales. While some markets continue to favor sellers due to low inventory and high demand, others are experiencing a shift towards a buyer’s market. It is essential for sellers to be prepared to adjust their asking prices and make strategic decisions to attract potential buyers in the current real estate landscape.