September typically marks the start of the slow season in real estate, but a dip in mortgage rates and a strong stock market kept activity “unseasonably resilient” last month, according to Zillow.
New listings rose 3 percent year over year in September, defying the usual fall cool-off. Even last month’s modest 2 percent dip from August was atypical, Zillow noted, as listings have historically fallen an average of 9 percent heading into the fall over the past seven years.
Kara Ng, senior economist at Zillow, attributed September’s “surprising stamina” to lower mortgage rates and stock market highs.
“This time of year can be a sweet spot for buyers,” Ng said. “There’s often less competition than in the spring and more time to make sure the home’s a perfect fit.”
Total inventory is up 14 percent compared to a year ago after hardly dropping (-1%) from August to September, Zillow found. However, inventory is still 18 percent lower than pre-COVID-19 pandemic levels for the month.
But market dynamics vary from city to city, and the report shows buyers are gaining the upper hand in more major metros.
A year ago, just six of the nation’s 50 largest metros were considered buyer’s markets, but that number has now risen to 15.
Buyers have the biggest edge in Miami, New Orleans, Austin, Texas, Jacksonville, Fla., and Indianapolis — largely due to a surge of new construction in recent years, the company said in its report.
Meanwhile, sellers hold more negotiating power in the Northeast and out West — Buffalo, N.Y., Hartford, Conn., San Jose, Calif., San Francisco and New York — where builders face some of the most stringent land use restrictions.
Zillow’s latest report underscores how sensitive both buyers and sellers remain to even small shifts in mortgage rates.
The average 30-year fixed mortgage rate slipped to 6.26 percent in mid-September from 6.58 percent a month earlier, Freddie Mac data shows. Further rate cuts by the Federal Reserve could drive mortgage rates lower, though that is not guaranteed.
The typical monthly mortgage payment, assuming 20 percent down, was $1,812 in September, and the typical U.S. home value was $364,891, per Zillow.
Nationally, 26.2 percent of listings in September had a price cut, up slightly from 24.9 percent a year earlier.
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