14 cities where homebuyers have leverage thanks to rising inventory and falling prices

• A sizable uptick in home inventory has brought down prices, giving buyers leverage.
• Fierce bidding wars that were common during the pandemic may be over for now.
• Here are 14 top US cities for buyers as 2025 begins, according to Realtor.com.

A slow year in the US housing market ended on a high note for buyers, and they might have even more luck landing new homes in the new year.

Property prices slid again in December in a less competitive market with steadily rising supply, according to Realtor.com's final housing market report for 2024, which was released in early January.

Median single-family home prices were 1.8% lower last month than the year prior at a going rate of $402,502, the firm found. The median price per square foot did rise by 1.3% year-over-year, though researchers said that was largely because buyers targeted smaller, cheaper houses.

Those declines stem from a long-awaited surge in home supply. Property listings were up for the 14th month and by 22% over last December. The number of unsold houses, including those under contract, also jumped for the 12th consecutive month and by 17.5% from 2023.

Supply has risen, but not everything is rosy

But while buyers got the lower prices they'd hoped for, many still didn't sign on the bottom line.

December was the quietest month on the housing front in nearly two years. The typical home was on sale for 70 days, compared to 62 days in November and 61 days in late 2023.

The slump coincided with a recent surge in mortgage rates, which just reached levels not seen since July. Higher borrowing costs are a major barrier for many buyers, and they've also deterred would-be sellers who are reluctant to trade in inexpensive mortgages for costlier ones. And when lofty mortgage rates cap what buyers can spend, sellers are stuck with weaker offers.

"With higher rates taking a bite out of homebuying power, fewer new sellers are coming to the market this winter compared with this past fall," Realtor.com's Ralph McLaughlin wrote in the January 2 report.

That's not to say there's a sales drought, as pending listings were 7.4% higher last month than a year earlier. Still, homes under contract had risen 14.7% in November before the latest spike in mortgage rates, which suggests that losses in home affordability are hurting the market.

While rates are a headwind, Realtor.com's economists are still calling for sales growth this year. However, the firm's forecast is for 1.5% growth, which is far less than optimists have predicted.

"Though rates are significantly higher today than they were just a few months ago, our 2025 forecast shows that as both lower rates and time chisel away at the 'lock-in' effect that has held back sales this year, we should expect home sales to rise modestly by 1.5% in 2025," McLaughlin wrote.

14 cities that favor buyers

Those who made buying a house a New Year's resolution might not have as much trouble as they would have a year or two ago, though they'll still need to look in the right places.

Home inventory increased last month across all four US regions and in all but one of the nation's 50 largest metropolitan areas, but there were still massive discrepancies. For example, the South and West saw supply rise by roughly 25% versus about 7% in the Northeast.

Since buyers have more options, there isn't as much pressure on them to bite on deals. In turn, homes were for sale for longer in 92% of major markets last month. That stalemate drove 12.9% of sellers to cut their asking prices, which was slightly higher than the 12.7% in December 2023.

To help buyers secure deals, Business Insider reviewed Realtor.com's latest housing data and found 14 large US metro areas that had lower prices and listing growth of at least 10%. Below are those cities and their median listing price, price growth on an overall and per-square-foot basis, active listing growth, share of homes with reduced prices, and the growth in that metric.