Despite an increase in the total pool of for-sale inventory, the number of new listings on the housing market has fallen year-over-year in each of the past four months, according to the latest Zillow Real Estate Market Report for March.
Overall inventory in the U.S. is 1.2% higher than in March 2018, but new listings fell 6.1% over the same period. And homes are staying on the market for longer – the median time on market increased four days in February from a year prior, the first such increase in four years and the largest since 2011. These trends indicate that the inventory growth is driven largely by cooling demand, not more home sellers.
"There is a narrative that inventory is growing, which favors buyers. But the how and why is important," said Zillow Director of Economic Research Skylar Olsen. "There may be more homes available for sale over the course of the month, but that's because more leftovers from previous months are sticking around. In truth, fewer homeowners are putting their homes on the market and buyer demand is falling back. Buyers won't have as much competition this shopping season and can take more time finding the perfect match, if it's out there."
The share of listings with a price cut is higher than this time a year ago in 33 of the nation's 35 largest housing markets. Price cuts are more prevalent in the most-expensive third of homes for sale, as 16.2% of top-tier homes have a price cut compared to 11.8% of bottom-tier homes.
National home values grew 6.6% year-over-year, and the median home is now worth $226,700. The rate of appreciation has slowed each month since peaking at 8% growth in December 2018.
Home values in San Jose, Calif., the most expensive of the 35 largest housing markets in the country, fell 0.2% from this time last year. This is the first time in four years that home values have depreciated on a year-over-year basis in any of the top 35 markets, and the first drop in San Jose in seven years.
Rent prices rose for the fifth straight month, up 2.5% on an annual basis. The median U.S. rent is $1,474. Rents grew fastest in Southwest markets Las Vegas (up 7.6%) and Phoenix (up 6.7%).
Mortgage rates listed on Zillow dropped sharply in March. Rates fell as low as 3.85% before ending the month at 4%, down twenty basis points from March 1. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.