Additional Existing Homes For Sale Slows Home Value Appreciation

On Tuesday, Zillow released its latest monthly existing homes for sale report. The total number of homes on the market has risen throughout the year, ticking up 4% from May to June to stand nearly 23% above last year’s low level. While inventory levels are still about 33% below pre-pandemic averages, that’s the smallest deficit since the fall of 2020 when the pool of available homes was quickly dropping.

Zillow notes that inventory is higher than last year in all of the 50 largest US metropolitan areas except two—New York and Cleveland—and rose month-over-month in all but five. Attractive listings are selling relatively quickly. But buyers still in the market are enjoying a few more days to weigh their choices than they had last summer. Homes sold in June were typically on the market for 15 days before the seller accepted an offer. That’s five days shorter than pre-pandemic norms, the smallest difference since June 2020.

Zillow notes that home buying continues to center on buyers’ willingness to accept tradeoffs.

For example, while mortgage rates have eased from May peaks, buyers are still contending with costs that have risen far faster than wages. A median-income household can afford mortgage payments when buying a typical home in just 11 of 50 major markets, even when putting 20% down. With many buyers pushed to the sidelines by costs, Zillow’s Sales Nowcast in June took a 9% step down from May; sales are 35% lower than pre-pandemic norms.

On the other hand, home value growth has slowed as inventory rises. Annual appreciation is a reasonable 3.2% nationally, down from a 2024 peak of 4.6% in March. Monthly growth has decelerated to 0.6%—the slowest June appreciation since 2011. Slower home value growth in the months ahead could give struggling buyers a chance to make up ground. Zillow forecasts home values to rise just 1% nationally through June 2025.