Homebuyer Good News: 27% Of Home Sellers and 38% Of Homebuilders Just Cut Prices
Homeowners who are selling cut prices on 27.4% of listings in July, and 37% of homebuilders cut prices by 5% in August.
One of the most notable stats in Zillow’s July Housing Market Report released last week is that sellers cut prices on 27.4% of listings last month. This is a needed tilt toward a buyer’s market without the bottom falling out for sellers. Below are other stats from Zillow, National Association of Realtors (NAR), Census, and National Association of Homebuilders (NAHB) worth calling out.
– In another buyer’s market signal, the median for-sale home has been listed for 60 days, the longest of any July in Zillow data, and 4 days longer than the pre-pandemic average.
– When sellers have to wait longer like this, buyers have the upper hand when making offers.
– Runaway home price appreciation has slowed in Zillow data to nearly flat at 0.2% through July. Again, this is a needed tilt toward a buyer’s market without the bottom falling out for sellers.
– Zillow says the typical U.S. home value is $367,965.
– It’s worth noting the median July price of an existing home (NAR) is higher than Zillow at $422,400.
– Likewise, the median July price of a newly built home (Census) is also higher than Zillow at $403,800.
– It’s also worth noting that a newly built home is now $18,600 cheaper than an existing home.
– This is a rare anomaly, helped by the fact that (per NAHB), 37% of builders cut prices this month by an average of 5%, and 66% of builders offered special incentives (like closing cost credits, upgrades, etc.) to buyers.
– If you combine all of this with the fact that rates are down 0.375%, from 6.875% to 6.5% since August began, the homebuyer picture is looking better than it has in awhile.
Rates may come down more, but it’ll be volatile as the Fed juggles jobs and inflation risks.
Please reach out with any questions.
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Reference:
– Why Home Values Rising in Half the Country, Falling in the Other (Zillow)