Sellers came out in droves in March, putting more than 375,000 homes on the market. It was an increase of nearly 9% compared to the same time last year, which helped create the first signs of a buyer’s market, according to data from Zillow’s monthly housing market report.
Zillow found that new listing activity was still about 19% below a typical March before the pandemic, but the inventory was steadily rising and tracking closely to normal seasonal trends.
However, despite increased inventory, buyers were not as enthusiastic. Zillow reported that newly pending sales were essentially flat from a year ago, even though the average mortgage rates were cheaper this year. The average mortgage rate in March was 6.65%, compared to 6.82% one year ago. About 265,000 listings went into a pending sale in March, 110,000 fewer than the number of new homes that came on the market.
The lack of buyers pushed housing inventory up to about 1.15 million homes, 19% higher than a year ago and the highest level of inventory since March 2020, according to Zillow. The housing inventory is now about 24% below the 2018-2019 averages for this time of year. Zillow reported that those figures are a major improvement from listing inventory levels in the month of March for both 2023 and 2024, when inventory was down 43% and 36%, respectively, compared to pre-pandemic levels.
Affordability remained an issue, with typical mortgage payments requiring more than 35% of median household income nationwide. Zillow also found that the typical U.S. home value was $359,741 in March, and the typical monthly mortgage payment, assuming a 20% downpayment, was $1,855.
The inventory level has meant less competition for homes and lower price growth. The typical home value rose a scant 0.2% month over month in March, the slowest growth for this time of year since at least 2018. Zillow reported that sellers reduced prices at record rates in March, with about 23% of the listings on Zillow receiving price cuts, the highest share for any March since at least 2018.
Monthly home prices fell in five major metro areas. Four were in Florida and one was in Texas, possibly signaling that the skyrocketing Sun Belt housing prices are coming back to earth. The largest decrease occurred in Miami, which was down 0.4% month over month. It was followed by Tampa, Fla. (-0.3%); Orlando, Fla. (-0.2%); Jacksonville, Fla. (-0.1%) and San Antonio (-0.1%).
Home values were also down from year-ago levels in 16 major metro areas, with the largest drop coming in Austin, Texas, where home values decreased an average of 4.6%. It was followed by Tampa (-4.5%); San Antonio (-2.7%); Phoenix (-2.5%); and Dallas (-2.4%).
