The market is getting more buyer-friendly as a result of a combination of increasing inventory levels and price decreases, according to Realtor.com’s July housing data. In July 2024, the number of active homes for sale increased by 36.6% from the same month the previous year, reaching a post-pandemic high. At the same time, the percentage of listings with price reductions reached 18.9%, the highest level since October.
“The inventory scars of the pandemic-era housing market are continuing to fade,” said Danielle Hale, Chief Economist of Realtor.com. “Although active listings are still short of the pre-pandemic mark, we saw the gap continue to narrow meaningfully as active listings hit a post-pandemic high. As sellers continue to list homes and buyers become choosier, the time a home spends on the market is extending, thereby helping the housing market move in a more buyer-friendly direction. In response, sellers are curbing expectations and reducing listing prices more often which could set the stage for more sales this fall, especially if mortgage rates continue to decline.”
Housing Supply Hits Post-Pandemic High
All four areas experienced year-over-year increases in active inventory in July, contributing to a nationwide increase in inventory. The total number of properties for sale climbed by 22.6% nationwide, marking the ninth consecutive month of growth and exceeding the 22.4% rate from the previous month. Although inventories remains below pre-pandemic levels, the difference between the levels in 2017–2019 and the current levels is decreasing.
The West and the South in particular had the biggest increases, with listings rising by 35.4% and 47.6%, respectively. The inventory gaps between the two regions are also narrowing the fastest; the South’s inventory is at 14% below pre-pandemic levels, while the West’s stockpile is 19.4% below. The Midwest and Northeast, whose inventory is still 46.8% and 55.5% below pre-pandemic levels, respectively, still have significant gaps that need to be filled.
“In addition to seeing inventory levels rise to heights not seen since before the pandemic, buyers are also seeing sellers cut prices on a much larger share of homes than last year,” said Ralph McLaughlin, Senior Economist at Realtor.com. “These are signs that the housing market is healing from an unhealthy state and becoming more balanced.”
Sellers Warming Up to Listing Homes and Cutting Prices
The percentage of listings with price reductions rose to 18.9%, the highest level since October of last year, suggesting that more sellers are entering the market and that they may have open minds in light of the recent decline in mortgage rates. The percentage of postings with price reductions increased year over year in all 50 of the major metropolises, while Denver (32.4%), Austin (31.4%), and Tampa (30.6%) experienced the largest increases.
In addition, the number of newly listed properties on the market increased by 3.6% this month over the same period last year, although it was noticeably less than the 6.6% increase seen in June 2024. For the ninth month in a row, there have been more newly listed properties, giving individuals who are ready to purchase greater options and availability.
The number of available house alternatives is increasing, but so is the amount of time properties are being listed for sale. The average time a home spends on the market is 50 days this month, which is greater than it was the prior year for the fourth consecutive month. This indicates that buyers have a better chance than in past months of snagging a home they’ve had their eye on. Nevertheless, it’s still more than a week (8 days) shorter than the average house spent in July from 2017 to 2019, even if it was listed for five extra days in July 2023.
Active Listings Improve, But Sit On Market Longer
While the number of homes for sale continues to accumulate, but it is still not back to pre-pandemic norms. Compared to the same time in 2023, there were 36.6% more homes listed for sale on a typical day in July. This was the largest number of properties listed since the pandemic and the ninth consecutive month of annual inventory growth.
In comparison, June saw a small moderation, rising 36.7% year over year. Even if July’s inventory is much better than it was three years ago, it is still 30.6% below average for 2017 to 2019. Given that inventory is still piling up on the market, this represents a continued improvement over the 31.2% deficit from last month.
The inventory of homes in the $200,000 to $350,000 price range increased by 47.3% over the previous year in July, continuing the five-month trend of expansion that has surpassed all other price ranges. But compared to the strong growth rate of 50% last month, this is lower. Smaller, more reasonably priced homes are still more readily available in the South, which is what is causing this growth.
In comparison to the previous year, the total number of homes for sale—which includes those under contract but not yet sold—rose by 22.6%. This was the eighth consecutive month of annual growth, surpassing the 22.4% pace from the previous month.
The South and West Are Closest to Bridging the Inventory Gap
All four regions witnessed an increase in active inventory in July compared to the prior year. Listings increased by 47.6% in the South, compared to inventory growth of 35.4% in the West, 22.7% in the Midwest, and 14.7% in the Northeast. The inventory gap in the South was the smallest, down 14.0% from pre-pandemic levels compared to the normal June from 2017 to 2019 before the COVID-19 Pandemic. In the West, the difference was 19.4%, and in the Midwest while Northeast, it was significantly greater, at 46.8% and 55.5%, respectively.
When compared to the previous year, the number of available residences rose in each of the top 50 metro areas. The metro areas with the highest inventory growth were San Diego (+77.7%), Orlando, FL (+78.7%), and Tampa, FL (+94.9%).
Even though inventory increase was larger this year than it was the year before, most metro areas still had less inventory than they did in the years before to the epidemic. Ten of the 50 biggest metro regions had larger inventory levels in July than usual, ranging from 2017 to 2019. From eight metros last month, this is an increase. The South and West were home to the majority of the top metro areas where inventory exceeded pre-pandemic levels: Austin, Texas (+39.2%), San Antonio (+25.8%), and Memphis, TN (+25.3%).
In comparison to July 2023, the West saw the most rise in newly listed house inventory—7.3%—while the Northeast, Midwest, and South saw 3.0%, 0.9%, and -0.5% growth in new inventory, respectively. In the South, where newly listed properties were 17.2% below pre-pandemic levels, the difference between newly listed homes and pre-pandemic 2017 to 2019 levels was likewise the smallest. The West had a decrease of 31.2%, the Midwest saw a decrease of 24.9%, and the Northeast saw a decrease of 30.6%.
July showed a decrease from 45 last month to 33 of the 50 major metros having more new listings than the prior year. But none of the major metro areas had a higher number of newly listed properties in July than they did in June 2017 to 2019. The metros that saw the largest growth in newly listed homes compared with last year included Seattle (+37.3%), San Jose (+30.8%), and Columbus (+17.4%).
To read the full report, including more data, charts, and methodology, click here.
