If you’re on the hunt for a low-priced (well, relatively low) starter home, you just may be in luck. According to a new report, August was the second consecutive month that new starter home listings grew.
In August, Realtor.com data shows that the number of newly listed homes between 750 and 1,750 square feet — “entry-level” homes, as the report refers to them — jumped 6.4% compared to last year. Starter homes now account for 37% of total for-sale inventory, up from just 30% a year ago. The median price for homes in that size range is $235,000.
“Encouraged by strong demand, more sellers have been listing their homes on the market,” says George Ratiu, manager of economic research for Realtor.com. “The crop of new listings includes a growing number of smaller homes, injecting a dose of affordability in this year’s hot markets.”
According to the data, starter home listings have risen the most in Virginia Beach, Virginia, where 17% more entry-level properties hit the market than last August. Milwaukee and Tampa, Florida rounded out the top three markets with 16.7% and 13.7% increases, respectively.
Rising FOMO among home sellers could help the trend continue. A recent survey from real estate platform Homelight shows that 41% of new homeowners — those who’ve owned a home only one to three years — are looking to cash in on their properties. In the Midwest, it’s a whopping 49%.
“Established homeowners aren’t the only ones gunning for a lucrative sale,” the report reads. “New homeowners are taking notice, too.”
Overall listings are inching up as well. August was the fourth straight month that national inventory levels have improved. More than 430,000 new listings hit the market that month — a jump of 18,000 compared to August 2020. Though total for-sale inventory is still down compared to last year, it’s now a mere 20% gap — rather than the 28% seen just a month ago.
While the trend certainly won’t solve the nation’s housing supply woes entirely, it does help tilt the market more in buyers’ favor. In fact, over 17% of last month’s sellers had to make price adjustments — the biggest share in almost two years.
Another report from real estate brokerage Redfin showed similar patterns. In the four-week period ending August 18, price cuts hit the highest point since October 2019. Price drops were most common in Naples, Tampa and Cape Coral, Florida, as well as in New York City and Houston.
The bump in inventory is also helping to moderate price growth. Listing prices were up just 8.6% for the month — “a welcome change from a year’s worth of double-digit jumps,” as Ratiu puts it.
“The noticeable gains in new inventory and accompanying price moderation are good news for buyers who have grown fatigued over the intense bidding wars experienced in the first half of this year,” Ratiu says. “As markets move into autumn, buyers can expect more choices, better prices and still-favorable mortgage rates.”
More from Money:
Baby Boomers Are Uniquely Poised to Cash in Big on Their Homes
After a Year of High Prices and Cutthroat Competition, Homebuyers Are Burned Out
‘Make Me Move’: Sellers Are Listing Their Homes at Ridiculous Prices Just to See What Happens
Money Moves
Every Saturday, Money real estate editor Sam Sharf dives deep into the world of real estate, offering a fresh take on the latest housing news for homeowners, buyers and daydreamers alike.
