According to Zillow’s new Market Heat Index, the Texas and Florida metropolitan areas dominate the best places for buyers, securing 7 of the top 10 spots.
“Prospective buyers in most markets today feel less intense competition than in recent spring shopping seasons. The pressure is easing as mortgage rates drive up costs and sellers return,” said Skylar Olsen, chief economist at Zillow.
“However, the pool of homes for sale remains remarkably low. “This means the nation remains a seller’s market despite high mortgage rates: homes are selling faster, with more buyer interest in any listing, than before the pandemic,” Olsen added.
According to Zillow, strong construction in Texas and Florida has helped restore inventory levels in those states, easing competition. Austin and San Antonio are two of the three markets with more inventory now than before the pandemic, while Tampa, Orlando and Jacksonville are among the smallest deficits.
The top market for sellers is Buffalo, New York, forecast by Zillow in January as the hottest market of 2024. Top metro areas for sellers include more expensive (and limited inventory) coastal tech hubs, markets relatively affordable indirects in the Northeast (Hartford and Providence) and the hot metropolitan areas of the Upper Midwest, Milwaukee and Minneapolis.
Zillow’s new Market Heat Index visually represents buyer urgency or seller confidence in an area and shows how that has changed over time. It takes into account the share of homes that sell quickly, the share of homes with a price cut, and buyer engagement with active Zillow listings in a market.
Spring competition slows as costs and inventory rise
Zillow’s report highlights that both inventory and new listings posted solid gains month-over-month and compared to last year. Buyers had many more options to choose from, as inventory increased 6.4% from March to April and was up 18% over last year, the second-largest annual increase since at least 2019.
They also had more new options, with new listings up almost 11% month over month and increasing almost 16% year over year. Despite April’s improvement, total inventory is 36% below pre-pandemic norms.
Mortgage rates soaring above 7% for the first time this year, along with these inventory injections, kept competition stable at a time of year when it typically increases.
US home values grew 1.2% from March to April and are 4.4% higher than a year ago. This is a slight slowdown from the 4.6% annual growth seen last month. A typical home in the United States is now worth $359,402.
Keep reading:
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· Places homebuyers are moving to in the US.