Homes for sale have completely flooded the US real estate market, with more listings now than any time since 2019.
Slower demand from buyers is one contributor, according to Zillow’s latest market report.
Homes are lingering on the market and there is less competition for them, making it a great market for buyers if they care to move.
The market itself is now considered balanced or in buyers’ favor in 28 of the 50 largest US cities.
The surplus of listings means buyers have gained negotiating leverage, can get a lower price and may even be able to get concessions.
A surge in new construction is also adding to market listings.
In June, 1.36 million homes were for sale – the most since November 2019.
A record-high 26.6 percent of listings dropped prices in June, as sellers desperately tried to entice buyers. The cuts were most common in the Sun Belt and Mountain States, specifically Denver.
Homes for sale have completely flooded the US real estate market, especially in Denver
Denver had the highest share of price cuts at 38.3 percent of the homes listed
The share of listings with a price cut for June was the highest it has been in that month since 2018, according to Zillow records. The numbers were also closing in on an all-time high of 27 percent – a record held by September 2022.
Price cuts are most common among Sun Belt and Mountain State markets that witnessed massive appreciation early in the pandemic.
According to the Zillow Home Value Index – which measures typical home values in cities – Denver had the highest share of price cuts at 38.3 percent of the homes listed. The average home price there is $586,433.
Raleigh, North Carolina, where the average home is worth $446,622, saw 36.4 percent of listings slash prices.
In Nashville, Tennessee, where the average singe-family home is worth $457,836, 35.5 percent of listings had to cut their prices.
Phoenix, which has an average home price of $453,381, saw 35.5 percent of sellers lower the price.
And in Dallas, where the average home price is $372,023, 35.5 percent of sellers were forced to cut their listing prices.
Raleigh, North Carolina, Nashville, Tennessee, Phoenix and Dallas round out the top five, according to data from Zillow
A home for sale in Dallas, where there has been a surplus of listings
Downtown Phoenix, where many home prices are being lowered
Other cities that saw home price cuts were Tampa, Florida, Salt Lake City, Indianapolis and Austin, Texas.
Sellers had the upper hand through most of the past five years as demand for homes far outweighed the options available.
Pictured: Kara Ng, Zillow senior economist
But affordability for buyers is still a major challenge.
Home value growth is at a standstill and mortgage costs have ticked down ever so slightly from a year ago. But high prices and borrowing costs are still big hurdles for buyers, especially first-timers.
‘The shift to a “neutral” market is significant, but it shouldn’t be mistaken for a universally cool or easy market for buyers,’ said Kara Ng, Zillow senior economist.
‘While negotiating power is more balanced, the affordability crisis remains a high barrier to entry, especially for first-time buyers.
‘Until we see a more meaningful improvement in purchasing power, this newfound balance will primarily benefit more well-off buyers.’
Phoenix is one US city where home prices are being lowered
A home for sale in Raleigh, North Carolina, which had a flood of listings hit the market this summer
Nashville, Tennessee, has seen a flood of homes getting price slashes
Inventory is still roughly 21 percent below pre-pandemic averages for June, but that deficit is expected to continue shrinking.
Zillow forecasts inventory to approach pre-pandemic levels by the end of the year.
For buyers, this is all good news.
They have more options to choose from, more time to decide on a house and more bargaining power than in prior years.
Sellers need to price realistically and set their listing apart from the crowd.
But something else experts are seeing is that buyers are not in a rush.
Listings that sell do so in 19 days – just one day faster than before the pandemic. That’s compared to 15 days in 2024 and 11 in 2023.
Zillow studied the housing market nationwide. In 22 of the 50 largest metropolitan areas, the markets are now labeled neutral, where neither buyers nor sellers have the upper hand.
Sellers are still correcting prices at record rates to try and entice buyers
Dallas, where home prices were being slashed due to a surplus on the market
In Phoenix, where the average home price is $453,381, 35.5 percent of sellers were forced to lower the price
In June, Zillow data showed 1.36 million home listings active on the market
That’s compared to 15 markets that were neutral in May and just eight at this time a year ago.
New listings stepped down significantly from May to June, dropping 10.9 percent.
Some of that is likely seasonal, since new listings peaked in May in 2018, 2019 and 2024.
But some potential sellers are also seeing slower sales in many markets and deciding to hold off.
Before having to lower listings, home prices had skyrocketed across the US since the pandemic, and it has become increasingly difficult for average Americans to purchase properties (according to 2024 Pew research, the middle class income range falls between $54,009 and $161,220).
From March 2019 to March 2025, home values jumped an alarming 39 percent, according to the National Association of Realtors (NAR).