Only six months following the most competitive home buying season of all time, realtor.com's January housing report released shows the U.S. housing market is off to a slower start in 2019. Although home prices are increasing, 15 percent of U.S. listings had price cuts in January, and declines in days on market have significantly decelerated since last year.

"The U.S. housing market is off to a slower start this year in many markets, compared to the rapid acceleration we saw last January," said Danielle Hale, chief economist for realtor.com. "Although the market is slowing, it's important to remember that we're coming off of four straight years of inventory declines that pushed the market to a record low availability of homes for sale. The real metric to keep an eye on is entry-level homes, which are the key to getting today's market back in balance. These homes are still in short-supply."

Sellers are making price cuts, especially in the sunshine states
In January, the share of homes which had their prices cut increased by 2 percent compared to the previous year. This increase was driven by price reductions in the nation's largest markets. In fact, 39 of the 50 largest markets saw an increase in their share of price reductions compared to last year. Las Vegas saw the greatest increase in price reductions in January, up 16 percent. It was followed by San Jose(+9 percent), Seattle (+8 percent), Orlando (+6 percent), and Phoenix (+5 percent).

Time on market increases across America's largest metros
Nationally, homes sold in 87 days in January, two days faster than last year. But the rate of this decline is decelerating. In January 2018, homes sold a full week faster compared to the previous year. In the 50 largest U.S. metros, the typical home spent an average of one more day on the market in January 2019, compared to the previous year. San Jose, Calif., Seattle and San Francisco saw the largest increases in days on market with properties spending 27, 19 and 15 more days on the market, respectively. On the flipside, properties in Birmingham, Ala., Milwaukee and Cleveland sold 14, 11 and 9 days faster than last year, respectively.

Inventory increases in expensive markets keep home prices high

The median U.S. listing price grew 7 percent year-over-year to $289,300 in January, slightly lower than last year's increase of 8 percent. This moderate deceleration in home prices is likely attributed to inventory growth in the upper tier of the nation's most expensive markets. The number of homes priced $750,000 and above grew 12 percent over last year, while the number of homes $200,000 and under declined by 6 percent. 

Of the 50 largest metros, 32 saw year-over-year gains in median listing prices, but only 12 markets outpaced the national increase of 7 percent. Rochester, N.Y. (18 percent increase), Milwaukee (16 percent increase), and Seattle (12 percent increase) posted the highest year-over-year median list price growth in January. The steepest median listing prices declines were felt in San Jose, Calif., where prices were down 9 percent, or $100,000. Dallas, Texas; Austin, Houston, and Nashville, Tenn., followed with a decline of 4 percent in Dallas and Austin and 3 percent in Houston and Nashville.