20 cities opening up for homebuyers as inventory grows and mortgage rates tumble
Bob Sacha/Getty Images
- Mortgage rates have been on a downward trajectory, even before the Federal Reserve's big rate cut.
- That, combined with growing home inventories, is creating a good environment for hopeful buyers.
- Listed below are 20 cities where housing supply has been rising.
Sellers have long had the upper hand in the US housing market. But the tables are finally starting to turn as mortgage rates slide and inventory rises across US cities.
Mortgage rates have fallen to the lowest levels since February 2023 as markets have priced in the Federal Reserve's long-awaited interest rate cuts, which finally arrived on Wednesday. Lower borrowing costs are crucial to reviving housing activity after one of the worst markets for affordability in decades.
Rising inventory is a big win for buyers
Home inventory is also heading in the right direction. The number of homes on the market rose 19.4% from July 2023 to July 2024, the National Association of Realtors found. There were nearly four months of supply available this summer, up from just over three in the year prior.
Theoretically, a surge in the supply of available properties should drive down prices since more houses on the market gives buyers more choices and, by extension, more bargaining power.
"In regions with healthier levels of supply, where buyers have more options and greater power to negotiate, sellers may need to be more flexible," Mackenzie Scibetta of real-estate site Zoocasa wrote in a September 18 note.
One drawback for buyers are new rules around real estate commissions, Scibetta noted. As of mid-August, sellers no longer have to pay agent commission fees for both their realtor and the buyers', which means that buyers may have to bear most or all of their realtor's fees.
However, Kendall Bonner of brokerage giant eXp Realty thinks sellers aren't out of the woods. Buyers may have enough leverage to get sellers to pay both commissions, as they did before.
"Sellers are going to have to think about not just the list price, but in light of the NAR settlement, the buyer's cost of acquisition," Bonner told Zoocasa. "In order to successfully transact, sellers might have to be prepared to receive offers where the buyer is requesting closing cost credits, concessions, and/or outright compensation of their realtor."
Despite the potential headwind from changes to commissions, buyers should be in better shape as mortgage rates steadily decline and the resolution of this fall's elections brings more clarity.
"With the combination of rates potentially lowering, and getting past the certainty that comes with consumers post-election, I think we will see some pent-up demand unlocked and some transitions of existing homeowners entering the market closing out the year," Bonner told Zoocasa.
Still, Scibetta pointed out that sellers locked into rock-bottom mortgage rates are likely still reluctant to move — especially as home prices continue to rise, as they did in Q2. That means buyers may still have an uphill battle, though their outlook certainly seems to be improving.
20 cities where homes are much easier to find
In her note, Scibetta listed 20 major US cities where home inventory rose meaningfully from July 2023 to July 2024. These aren't necessarily the markets with the fastest property growth, but instead ones that had notable growth, based on active listings data that was available and accessible.
Below are those 20 real-estate markets, sorted by inventory growth from July 2023 to July 2024, along with the number of active listings in each of those months, according to Zoocasa.