Buyer urgency wanes in September housing market

Housing market velocity slowed in line with typical seasonality as summer turned to fall, but it still remains strong, according to Zillow.

While the inventory of for-sale homes trailed year-ago totals by 19.9% and 37.7% from September 2019, it inched up 0.4% from August. It marks the fifth straight increase month-over-month and the first annual decrease below 20% since July 2020.

The Zillow Home Value Index rose 18.4% annually in September, the highest pace of yearly appreciation on record dating back to 2000. However, the 1.6% growth in September from August declined from the previous monthly rates of 1.8% and 2%, respectively. Further, the share of listings that underwent price cuts before selling nearly doubled to 14.7% in September from 7.9% in August.

The median time for-sale properties spent on the market before going under contract ticked up to nine days from eight in August and this slight cooling helped prospective buyers, according to Jeff Tucker, Zillow’s senior economist.

"Homes are still selling quickly, and prices have not receded, but it's not quite as extreme a sellers' market as we saw back in the spring and summer,” Tucker said in the report. “Buyers today will benefit from a little more time to pick the right home and a few more listings to choose from."

Broken down by the 50 largest metro areas, Las Vegas gained the most housing supply with a 3.9% jump month-over-month. Riverside, Calif., Detroit and Raleigh, N.C., joined as the other markets with gains above 3%, at 3.7%, 3.4% and 3.3%, respectively. Miami and San Jose, Calif., tied for the biggest declines from August at 3.5%, followed by 3.4% in New York and 3.2% in San Diego.

Raleigh led the country in monthly home value growth at 3%, trailed by 2.6% in Tampa, Fla., and 2.5% in Jacksonville, Fla. The smallest gains from August came in San Jose and Washington, D.C., at 0.4%, and Pittsburgh and Milwaukee at 0.5%. On an annual scale, Austin, Texas, paced the nation with a 44.9% spike, followed by 32.2% in Phoenix and 28.2% in Salt Lake City. New Orleans had the lowest growth from September 2020 at 13.2%, just below 13.3% in Washington, D.C., and 13.5% in Baltimore.