Housing Market Shifts to Neutral for First Time in More Than 6 Months
Competition for homes has been minimal over the past several months, with July marking the first time the market has been in a neutral position since December 2023
Aug. 19, 2024
2 min read
Image: Jin / stock.adobe.com
The housing market is currently in a neutral position due to a lack of buyer competition.
The housing market is moving into a neutral position, offering a more balanced environment for both buyers and sellers. According to a report from real estate marketing platform Zillow, July 2024 marked the first time the housing market has been in a neutral position since December 2023. This is due to a recent slowdown in competition causing homes to sit on the market for longer. Inventory has also increased by 25% year-over-year, marking the eighth consecutive month of year-over-year growth. While inventory is still 31.5% below pre-pandemic levels, the deficit is the smallest it’s been since October 2020. As more homes become available, competition is decreasing even more. This is reflected in the rising share of price cuts, with more than 26% of Zillow listings experiencing a price reduction in July. However, competition could increase if mortgage rates start to drop and more buyers enter the market.
Lower rates aren’t likely to encourage a comparable wave of current homeowners to sell. Zillow surveys show 80% of recent sellers were influenced by major life events, such as a change in their household size or working situation. New listings typically surge in spring and then taper off as homeowners aim to sell, buy another house, and be moved in before school and the fall holidays begin.
More demand without a corresponding increase in supply would likely mean competition ramping back up, or at least a delay in the usual post-summer cooldown.
