SEATTLE, WA — The frenetic pace of the home shopping season is slowing down, according to a new report from Zillow®. As affordability remains a challenge, monthly home value growth for June hit its lowest point in 14 years.
- Slowing Home Value Growth: Monthly home value growth for June hit a 14-year low, with annual appreciation at 3.2% nationally.
- Rising Inventory: The number of homes on the market increased by 4% from May to June, standing nearly 23% above last year’s low.
- Affordability Issues: A typical home remains unaffordable for a median-income household in 39 of the 50 major markets, even with a 20% down payment.
- Increased Price Cuts: Nearly 24.5% of listings received price cuts in June, the highest rate for this time of year since 2018.
- Extended Market Time: Homes sold in June were on the market for an average of 15 days before an offer was accepted, giving buyers more time to make decisions.
“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. She noted that the market is starting to resemble pre-pandemic conditions in terms of competition, though costs remain high.
Inventory Trends Upward
The number of homes on the market has climbed steadily this year. From May to June, inventory rose 4%, placing it nearly 23% above last year’s low. Although levels are still 33% below pre-pandemic averages, this is the smallest deficit since fall 2020.
Inventory increased year-over-year in nearly all of the 50 largest U.S. metropolitan areas, except New York and Cleveland. Month-over-month, it rose in all but five metros.
Homes that are attractively priced and marketed continue to sell quickly, but buyers now have more time to consider their options. In June, homes were on the market for an average of 15 days before an offer was accepted—five days shorter than pre-pandemic norms but the smallest difference since June 2020.
Affordability Challenges Persist
Despite a slight easing from May’s mortgage rate peaks, high costs continue to weigh on buyers. A typical home remains unaffordable for a median-income household in 39 of the 50 major markets, even with a 20% down payment.
This financial strain has sidelined many buyers. Zillow’s Sales Nowcast showed a 9% decline in June from May, with sales sitting 35% below pre-pandemic levels.
Slower Home Value Growth
As inventory rises, home value growth has decelerated. Annual appreciation stands at 3.2% nationally, down from a peak of 4.6% in March 2024. Monthly growth has slowed to 0.6%, the lowest rate for June since 2011.
Zillow forecasts modest home value increases of just 1% nationally through June 2025, which may provide a breather for struggling buyers.
Price Cuts Become More Common
While sellers still hold a slight advantage in most markets, the balance is shifting. Southern markets, with the exception of Dallas and Raleigh, are already neutral or favoring buyers.
In June, nearly 24.5% of listings received price cuts, the highest rate for this time of year since Zillow began record-keeping in 2018. This trend suggests sellers are becoming more willing to negotiate to attract buyers.
As the market adjusts, buyers may find more opportunities to negotiate and save for down payments, making homeownership a more attainable goal in the near future.
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