Rising mortgage rates might be dragging the housing market down, but a recent trifecta of good news—more home inventory, stable home prices, and a jump in home price reductions—could help tip the scale to a more positive place.

The latest monthly housing report from Realtor.com® reveals that the total number of homes for sale in April was 30.4% above last year’s levels, marking six months of inventory growth. Home shoppers facing the spring market can also enjoy a rush of fresh listings, which are 12.2% above last year’s levels.

“The number of homes actively for sale was notably higher compared with last year,” says Realtor.com Chief Economist Danielle Hale. “Sellers continued to list homes at a greater rate than last year. This has led to a promising increase in more affordable homes for sale, especially in the South.”

Home prices hold the course

Home prices have been increasing seasonally, from $424,900 in March to $430,000 in April, but they remained flat from a year ago.

“Whether buyers and sellers see the current home price trend as good or bad will really depend on their perspective in the market,” says Hale.

“On the one hand, there is a small contingent of buyers who are really rooting for home prices to collapse so that affordability improves and they can become homeowners. This group is probably disappointed by flat pricing. But when affordability is at long-term lows, a flat price trend is one way that the market corrects.”

The other bright spot for buyers on a tight budget is that sellers who list their homes for too high a price are gauging the housing market’s tepid temperature and reacting accordingly.

“Sellers are also continuing to adjust to market conditions, with price reductions remaining above the previous year’s levels,” says Hale.

Indeed, the percentage of homes with price reductions increased to 15.5% this April compared with 12.3% for the same month last year.

Where housing inventory is on an upward streak

The South is making a play for the best place for homebuyers to scroll through the most listings—and they’re affordable, too.

Southern states claimed more than half (56.7%) of all the available inventory in April 2024, and the most new listings at 19.7%. Meanwhile, inventory rose by 18.4% in the Midwest but only 7.5% in the West and 2.9% in the Northeast.

The Sunshine State led the pack of metros that saw the most inventory growth, including Tampa (+69.5%), Orlando (+64.2%), and Jacksonville (+59.1%).

For the past three months, homes priced in the $200,000 to $350,000 range outpaced all other price categories. These reasonably priced homes grew by a whopping 41.0% compared with last year with the South driving the boon. Home shoppers can expect to find attached homes such as condos, townhomes, or row homes in this price category.

Inventory is up overall in America’s biggest cities

All but five of the 50 largest metros saw a growth in listings this April compared with last year. New listings were also up in 48 of the 50 metros.

The freshest listings are in Seattle (+46.5%), San Jose, CA (+40.6%), and Austin, TX (+36.1%).

Despite the increase, only three metros saw more newly listed homes than what was available before the COVID-19 pandemic. Yet whether the jump in inventory across the United States slows down or not will likely depend on how potential sellers feel facing rising mortgage rates.

“If mortgage rates remain elevated over the next few months, the housing market may see a return to the holding pattern of scarce inventory, as we’ve seen over the past few years,” says Hale. “I think the next few months will test whether or not homeowners have acclimated and are ready to move forward with selling no matter what rates do, or whether they are still as interest rate–sensitive as buyers.”

The spring market is in full swing

Despite mortgage rate headwinds, buyers are still snapping up homes.

The typical home spent 47 days on the market, which is two days less than last April and nine days less than before COVID-19.

Whether or not more buyers and sellers enter the spring housing market all comes down to personal economic reasons.

“It is definitely a challenging housing market, so I empathize with both buyers and sellers,” says Hale. “Given how challenging the market is, it’s important to say that it might not be the right time for everyone to stay in the game, and that’s OK.”

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