Home shoppers are looking at more options to choose from this fall as the number of homes for sale sits at the highest level since May 2020 and rates are poised to start coming down. The number of homes actively for sale grew by 35.8% in August, the 10th straight month of growth, according to the Realtor.com^® August Housing Trends Report. At the same time, home sellers pulled back, with -0.9% fewer newly listed homes on the market compared with last year.

"In April we noted that rising for-sale inventory was likely to lead to more balance between buyers and sellers. This August, as the number of homes on the market continues to climb, price cuts are more common, asking prices are moderating, and homes are taking longer to sell. The widely anticipated Fed rate cut has already ushered in lower mortgage rates, but it seems that some buyers and sellers are waiting for additional declines," said Danielle Hale, Chief Economist at Realtor.com^®. "As the market slows seasonally, fall is one of the best times to buy a house. Falling mortgage rates are likely to bring out additional home shoppers and a busier fall season than usual, but the boost in activity is unlikely to overwhelm the usual seasonal slowdown. Shoppers, who are out this fall, are likely to face lower competition than is expected in spring 2025 as more shoppers anticipate better mortgage rates."

The median price of homes for sale this August decreased by 1.3% compared with last year, at $429,990, however, the median price per square foot grew by 2.3%, indicating that the inventory of smaller and more affordable homes continues to grow in share. Homes spent 53 days on the market, the slowest August in five years.

August 2024 Housing Metrics – National

Inventory continues to grow

There were 35.8% more homes actively for sale on a typical day in August compared with the same time in 2023, marking the tenth consecutive month of annual inventory growth and the highest count post-pandemic. This is a slight deceleration from July, which was up 36.6% year-over-year. This is the second consecutive month where the rate of growth has decreased from the prior month. While inventory this August certainly continues to improve, it is still down 26.4% compared with August 2019 levels. This is a slight improvement from last month's 28.7% gap.

Continued growth in affordable homes for sale

In August, as in the previous six months, the growth in homes priced in the $200,000 to $350,000 range outpaced all other price categories, as home inventory in this range grew by 46.1% compared with last year and is only down slightly from last month (47.3%). This increase continues to be driven by a greater availability of smaller and more affordable homes in the South.

Just like buyers, sellers pulled back this August as newly listed homes were 0.9% below last year's levels, a reversal from gains in new listings seen in July (8.4%) that breaks a nine month streak of increasing listing activity. The sharp decrease in mortgage rates seen in mid-August could lead to an increase in listings in the coming months as lower rates begin to entice the marginal homeowner to sell.

Days on market reaches five year high

The typical home spent 53 days on the market in August, an increase of seven days from a year ago. It was the slowest August in five years, though time on the market was still six days less than the pre-pandemic average for August. Homes are spending more time on the market in all regions, led by the South (nine days longer), and followed by the Midwest (three days) and the West and Northeast (two days).

"We have found that the market slows by about one day for every 5.5 percentage point increase in the year-over-year number of active listings," said Ralph McLaughin, Senior Economist at Realtor.com^®. "Given the rapid growth in inventory we're seeing now, that can mean changes in some markets of up to 15-20 more days on the market than last year."

Price reductions become more common

As the number of active listings and days spent on the market grew, the percentage of homes with price reductions also increased in August to 19.2%, up 3.0 percentage points from last August. The share of price reductions rose in all regions, led by the West (+ 3.5 percentage points), and followed by the Midwest (+3.3 percentage points), the South (+2.8 percentage points) and the Northeast (+2.0 percentage points).

Median list price falls, but price per square foot continues to grow

The national median list price fell 1.3% to $429,990 in August compared to last August at the same time the median listing price per square foot rose 2.3% compared to last August, as the inventory mix shifted toward smaller homes. Compared to August 2019, the typical listed home price grew by 36.2% while the price per square foot rose by 51.0%.

South and West are closest to bridging pandemic era inventory gap

All four U.S. regions continued to see active inventory growth compared with August of last year; however, inventory in the South and West has recovered the most compared to pre-pandemic inventory levels.

For August, active listings grew by 46% in the South, 35.7% in the West, 23.8% in the Midwest and 15.1% in the Northeast. The South's inventory gap was the smallest compared to pre-pandemic levels, with inventory down 12.2% in August compared to the typical August in 2017-19. Inventory was 16.6% lower in the West, 44.9% lower in the Midwest, and 54.5% lower in the Northeast compared with pre-pandemic levels.

Of the 50 largest metro areas, just 11 had higher levels of inventory in August compared with pre-pandemic levels, including Austin,Texas (+36.6%), Memphis, Tenn. (+28.7%) and San Antonio (+25.2%).

Additional details and full analysis of the market inventory levels and additional trends in listing prices and more can be found in the Realtor.com® August Monthly Housing Report.

August 2024 Housing Overview of the 50 Largest Metros