Greg Taylor SVP, Performance Marketing and Media Buying | realtors.com
There is positive news for potential homebuyers who have been hesitant to enter the housing market due to limited housing options and high monthly mortgage payments. Mortgage interest rates declined in mid-September following a rate cut by the Federal Reserve, which subsequently lowered mortgage rates. This has encouraged some sellers to list their homes, taking advantage of the new conditions.
"All regions saw a significant bump in new listings compared with September 2023," stated Ralph McLaughlin, senior economist at Realtor.com. New listings increased by 15.6% in the Northeast, 13.4% in the West, 8.3% in the South, and 6.1% in the Midwest.
According to Realtor.com's September Housing Market Report, 43 out of the 50 largest metro areas experienced an increase in listings over the past year.
An increase in housing supply often leads to a decrease in median list prices, resulting in lower mortgage payments for buyers. Certain markets are expected to offer real savings on monthly payments.
"What we saw in the housing market in September were signs that the 'lock-in' effect of high mortgage rates may have started deteriorating as sellers in pricier markets led the country in the uptick in new listings," McLaughlin noted. "The effect of falling mortgage rates leads to larger drops in mortgage payments in pricier markets compared to cheaper markets."
Buyers could see substantial savings where there is a significant rise in inventory. In San Jose, CA—a tech hub—buyers might save $935 on their monthly mortgage payment due to a 27.1% boost in inventory. Seattle experienced a 41.8% increase, offering potential savings of about $504 per month; while Washington DC could provide $392 monthly savings thanks to a 26.2% rise.
Despite these reductions, these desirable areas remain costly: San Jose's median home price exceeds $1.4 million—nearly one million more than the U.S.'s median list price of $425,000—but it indicates a possible shift toward a buyer's market.
Here are some cities where increased listings are impacting both real estate markets and buyers:
Seattle, WA:
- Median list price: $772,425
- Percentage increase of new listings year-over-year: 41.8%
- Potential mortgage savings: $505
San Jose, CA:
- Median list price: $1,432,170
- Percentage increase of new listings year-over-year: 27.1%
- Potential mortgage savings: $936
Washington DC:
- Median list price: $599,948
- Percentage increase of new listings year-over-year: 26.2%
- Potential mortgage savings: $392
Denver CO:
- Median list price: $610,250
- Percentage increase of new listings year-over-year: 25.5%
- Potential mortgage savings: $399
Boston MA:
- Median list price: $839,900
- Percentage increase of new listings year-over-year: 24.4%
- Potential mortgage savings: $549
Raleigh NC:
- Median list price: $453,165
- Percentage increase of new listings year-over-year: 24.2%
- Potential mortgage savings: $296
Los Angeles CA:
- Median list price: $1,154,440
- Percentage increase of new listings year-over-year: 22.6%
- Potential mortgage savings: $754
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