Lower mortgage rates and rising inventory are giving home buyers a window of opportunity at an unusual time of year, according to the latest market report from Zillow. Affordability has improved substantially for home buyers, and competition among them could extend into the fall instead of fading away as is typical at this time of year.

“Late summer may be an opportunity for buyers who have been waiting in the wings for a monthly mortgage payment they can qualify for,” said Skylar Olsen, Zillow chief economist. “Buyers have more options to choose from for two reasons. For one, it’s easier to qualify for more of the homes on the market now that mortgage rates are a bit lower. Beyond that, more inventory is becoming available — enough to improve buyer negotiating power. Attractive properties in hot markets are still selling quickly, but some metros — or neighborhoods within them — have flipped further in favor of buyers.”

Mortgage rate declines have made buying a home roughly affordable again at the national level (meaning monthly payments generally take less than one-third of median household income), assuming a buyer puts 20% down and before taxes and insurance are accounted for. Nationwide, the monthly payment on a typical home purchase has fallen by more than $100 since a peak in May. That drop is more than $300 a month in the ultraexpensive San Francisco metro area.

Beyond lower costs, a number of metrics are moving in buyers’ favor. The Zillow market heat index shifted from being in favor of sellers into neutral territory in July. For the past two years, sellers held their edge nationally until October.

Homes are taking longer to sell than in recent history, but shorter than in pre-pandemic times. Homes that sold in August took 20 days to go pending, two more than in July, but about six days faster than at this time of year before the pandemic. And while inventory growth has slowed, nearly 1.18 million homes are on the market, more than any month since September 2020.

Lower rates could stall or slow a normal autumn cooldown, because right now buyers are more likely to be motivated by lower rates than sellers are.

Some signals are already pointing to an altered trajectory in the housing market. The share of listings on Zillow with a price cut ticked down from July to August, reversing an upward trend of rising every month since March. Just under 26% of homes on the market had a price cut in August. That’s relatively high for this time of year, but not a record, as seen in recent months.

Opportunities For Buyers

• Lower rates mean improved affordability: Purchasing power is greater, and buying a house may now fit into buyers’ monthly budgets.
• Homes are taking longer to sell, giving buyers more time to decide and more leverage in negotiations.
• Inventory continues to slowly recover from a years-long shortfall, giving buyers more options.

Opportunities For Sellers

• Well-priced and -marketed homes are still selling relatively quickly, in 20 days, almost a week faster than at this time of year before the pandemic.
• Lower mortgage rates could raise buyer competition in the fall. The share of homes with a price cut dropped in August.
• One-third of homes that sold in July — the most recent data available — went for more than asking price.
• Seventy percent of sellers turn around and buy — the benefits to buyers given above apply to their next home.

Metropolitan Area*	August Zillow Home Value Index (ZHVI) (Raw)	Market Favors**	Typical Mortgage Payment***	Typical Mortgage Payment Change, Month over Month	Median Days on Market Before Going Pending	Share of Listings With a Price Cut	Inventory Change Since Before the Pandemic
United States	$362,143	neutral	$1,827	-3.4 %	20	25.9 %	-30.8 %
New York, NY	$676,836	strong seller	$3,399	-3.0 %	27	13.3 %	-54.4 %
Los Angeles, CA	$956,784	seller	$4,782	-3.0 %	18	20.9 %	-30.6 %
Chicago, IL	$325,651	seller	$1,640	-3.2 %	12	26.0 %	-50.6 %
Dallas, TX	$372,980	neutral	$1,884	-3.7 %	31	34.8 %	-8.1 %
Houston, TX	$307,366	neutral	$1,553	-3.6 %	34	29.9 %	-12.6 %
Washington, DC	$567,618	strong seller	$2,860	-3.4 %	11	23.0 %	-44.4 %
Philadelphia, PA	$366,585	seller	$1,846	-3.3 %	11	22.9 %	-48.0 %
Miami, FL	$489,781	buyer	$2,473	-3.5 %	45	22.0 %	-11.6 %
Atlanta, GA	$383,408	neutral	$1,936	-3.6 %	29	32.1 %	-14.8 %
Boston, MA	$699,791	strong seller	$3,520	-3.3 %	11	19.3 %	-44.4 %
Phoenix, AZ	$456,508	neutral	$2,311	-3.8 %	30	33.3 %	-20.5 %
San Francisco, CA	$1,149,479	strong seller	$5,803	-3.6 %	16	18.9 %	-4.1 %
Riverside, CA	$583,804	seller	$2,943	-3.3 %	23	23.7 %	-32.9 %
Detroit, MI	$254,757	seller	$1,286	-3.5 %	11	25.8 %	-38.1 %
Seattle, WA	$740,004	seller	$3,718	-3.4 %	14	27.5 %	-26.3 %
Minneapolis, MN	$375,730	strong seller	$1,894	-3.5 %	21	26.9 %	-35.8 %
San Diego, CA	$943,960	seller	$4,767	-3.6 %	19	27.0 %	-36.1 %
Tampa, FL	$378,042	buyer	$1,914	-3.8 %	37	35.6 %	9.5 %
Denver, CO	$582,046	neutral	$2,931	-3.5 %	23	35.7 %	-2.6 %
Baltimore, MD	$386,072	seller	$1,949	-3.6 %	9	25.5 %	-49.2 %
St. Louis, MO	$252,843	seller	$1,273	-3.3 %	7	24.4 %	-47.6 %
Orlando, FL	$397,206	buyer	$2,008	-3.6 %	32	31.2 %	9.7 %
Charlotte, NC	$381,083	neutral	$1,926	-3.6 %	25	27.9 %	-3.7 %
San Antonio, TX	$284,322	neutral	$1,439	-3.8 %	42	32.3 %	12.6 %
Portland, OR	$547,350	seller	$2,758	-3.5 %	21	29.2 %	-24.4 %
Sacramento, CA	$579,242	seller	$2,924	-3.6 %	17	28.8 %	-34.8 %
Pittsburgh, PA	$215,178	neutral	$1,092	-3.7 %	15	29.3 %	-40.6 %
Cincinnati, OH	$286,903	seller	$1,446	-3.3 %	7	29.8 %	-37.7 %
Austin, TX	$453,837	buyer	$2,296	-3.9 %	58	30.2 %	30.5 %
Las Vegas, NV	$433,110	seller	$2,179	-3.1 %	21	27.6 %	-27.3 %
Kansas City, MO	$303,802	seller	$1,529	-3.4 %	10	30.8 %	-44.0 %
Columbus, OH	$315,751	seller	$1,590	-3.4 %	8	31.9 %	-29.7 %
Indianapolis, IN	$280,720	neutral	$1,417	-3.5 %	13	33.7 %	-20.6 %
Cleveland, OH	$232,456	strong seller	$1,171	-3.1 %	8	24.4 %	-56.8 %
San Jose, CA	$1,588,006	strong seller	$7,903	-2.7 %	13	18.5 %	-26.0 %
Nashville, TN	$440,163	neutral	$2,224	-3.6 %	27	34.5 %	-10.5 %
Virginia Beach, VA	$353,185	seller	$1,777	-3.3 %	25	25.2 %	-47.8 %
Providence, RI	$490,822	strong seller	$2,463	-2.9 %	10	22.2 %	-61.4 %
Jacksonville, FL	$358,068	buyer	$1,812	-3.7 %	49	32.5 %	4.9 %
Milwaukee, WI	$349,218	seller	$1,759	-3.3 %	19	19.4 %	-29.7 %
Oklahoma City, OK	$234,943	neutral	$1,185	-3.5 %	21	30.6 %	-14.8 %
Raleigh, NC	$444,473	seller	$2,246	-3.6 %	20	34.5 %	-19.2 %
Memphis, TN	$238,246	buyer	$1,209	-3.8 %	34	28.5 %	0.9 %
Richmond, VA	$371,454	strong seller	$1,869	-3.3 %	10	26.1 %	-44.7 %
Louisville, KY	$259,165	neutral	$1,305	-3.3 %	10	29.2 %	-31.3 %
New Orleans, LA	$237,679	buyer	$1,206	-4.0 %	42	24.9 %	42.1 %
Salt Lake City, UT	$541,348	seller	$2,731	-3.6 %	19	34.1 %	-21.0 %
Hartford, CT	$366,985	strong seller	$1,846	-3.1 %	7	18.4 %	-68.0 %
Buffalo, NY	$268,628	strong seller	$1,354	-3.2 %	11	20.3 %	-44.1 %
Birmingham, AL	$250,032	neutral	$1,265	-3.7 %	24	25.7 %	-26.2 %