It looks like the housing market is back to breaking records again. According to Zillow, the typical U.S. home value just hit its highest point in July, clocking in at just under $350,000. That’s up 1.4% compared to a year prior and marks the first annual uptick in 16 months.

It’s surprising, given that mortgage rates are currently averaging over 7%, according to Freddie Mac, but also not, considering just how low housing supply continues to be.

In fact, new listings were down 26% in July year over year and 28% in June. Only 336,000 homes went on the market last month—a number more fitting of “a frosty January,” as Zillow economist Jeff Tucker puts it. 

Total active inventory was down, too—15% for the year and a whopping 44% compared to pre-pandemic days in July 2019. And according to Tucker, that’s likely the best supply we’re going to see all year.

“July will likely mark the high point for inventory in 2023, if it follows seasonal trends seen in 2018 and 2019,” Tucker says. “At best—for buyers—it could inch slightly higher in August, like in 2021 and 2022, but either way, buyers should not expect to see many more homes available for sale on Zillow at any time this year than they do now.”

Where Home Values Have Jumped the Most (and Least)

Of course, those are only national numbers. If you look at market-level data, some of the changes are even more significant. 

All in all, the Midwest and Northeast regions saw the biggest growth in home values from July 2022 to July 2023. In Hartford, Connecticut, for example, home values have increased 5.67% compared to last year. Cincinnati, Milwaukee, Wisconsin, Miami, Philadelphia, and Richmond, Virginia have all seen jumps of 5% or more, too.

That said, the South and West appear to have experienced the biggest drops. Austin, Texas, notched the biggest dip in home values, with a jaw-dropping 10.42% downslide year over year. Phoenix’s values dipped 6.11%, while Las Vegas saw a 5.99% fall. Other cities with notable drops included San Francisco, Dallas, and Sacramento, California.

The Tides May Be Turning

The numbers may have broken records this time around, but it’s unlikely to happen again this year. In fact, the data is already starting to show signs of the typical seasonal slowdown.

For one, sales are low. Pending sales—which mean a home has gone under contract — were down 6.5% in July compared to June. The typical time on the market was 12 days for the month—up from 11 days in June and 10 days in April and May. In addition, the share of homes with a price cut also increased.

It’s not great news for sellers, but it’s certainly good for those considering buying a home, indicating the housing market is seeing less competition, more time to shop, and hopefully lower prices down the line.

As Tucker puts it: “The gradual tapering of sales volume and sales speed together indicate that negotiating power has likely begun to swing in buyers’ favor, and those who remain in the hunt should expect the pendulum to swing more in their favor as the summer wears on.”

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.