Mortgage Rate Dip Brings Buyers and Sellers Back (September 2024 Market Report) - Zillow Research
In September 2024, the real estate market experienced a resurgence of activity as both buyers and sellers returned, spurred by a dip in mortgage rates. The rates fell to a two-year low of 6.08% by late September, significantly enhancing buying power by over $40,000 for potential homebuyers compared to May. This increase in affordability allowed more buyers to enter the market and access a wider range of homes. However, a subsequent rise in mortgage rates following a strong jobs report in early October slightly diminished these gains.
The market dynamics varied across regions, with the Southeast witnessing a stronger return of sellers compared to buyers, leading to an increase in active inventory and a slight reduction in competitive pressure. Notably, Atlanta and other large Southern metro areas have shifted towards being buyers' markets, with ten of the 50 largest metros now favoring buyers, all located in Florida, Georgia, Texas, Tennessee, or Louisiana. This trend is attributed to a higher number of new listings in the Southeast, contrasting with the more competitive markets along the coasts where homeowners remain more locked in.
Home values across the U.S. showed mixed trends. The typical U.S. home value stood at $360,999, with a typical monthly mortgage payment of $1,760 assuming a 20% down payment. Home values increased month-over-month in only two of the 50 largest metro areas: New York City (0.3%) and Providence (0.1%). Conversely, 44 major metro areas experienced monthly declines, with the largest drops in San Francisco (-1.1%), San Jose (-0.9%), New Orleans (-0.8%), Austin (-0.8%), and Tampa (-0.7%). Year-over-year, home values rose in 43 of the 50 largest metro areas, with the highest annual gains in San Jose (7.8%), Hartford (7.6%), New York (7.1%), Providence (7%), and Buffalo (5.9%). However, seven major metro areas saw year-over-year declines, with New Orleans and Austin experiencing the largest drops at -4% each.
Inventory levels and new listings also presented a complex picture. New listings decreased by 8.3% month-over-month in September and were 1.2% lower than the previous year, remaining 17% below pre-pandemic levels. Total inventory saw a slight decrease of 0.2% from the previous month but was 21.6% higher than the previous year, although still 29.1% below pre-pandemic levels. Price cuts were observed in 25.1% of listings in September, a decrease of 0.8 percentage points from the previous month but an increase of 1.2 percentage points from the previous year. Additionally, 30.5% of homes sold above their list price, down 2.8 percentage points month-over-month and 6.2 percentage points from the previous year.
Newly pending sales decreased by 7.3% in September from the prior month but increased by 3.5% from the previous year. The median days to pending, which measures the typical time from initial listing to contract, was 21 days in September, up one day from the previous month and six days from the previous year.
According to Zillow’s market heat index, the national market remains neutral. The strongest sellers' markets include San Jose, Buffalo, Hartford, Boston, and New York, while the strongest buyers' markets are New Orleans, Miami, Jacksonville, Austin, and Tampa.
