Listings of existing homes rose 12% in February compared with a year earlier, and one in five of them are seeing price cuts, according to Zillow Group Inc. 

Even though the supply remains tight and the few available houses typically get under contract in just 17 days, the rise in listings is a welcome sign for potential buyers. The gains are particularly strong in many Southern metros that saw housing values surge during the pandemic.

With borrowing costs punishingly high, many homeowners who locked in low mortgage rates years ago have been reluctant to move. Some might now be getting ready to sell, even if it means taking a small cut from recent highs. Typical home values have risen 41% nationwide since before the pandemic, according to Zillow, meaning most sellers come ahead from when they bought the house.

"For many households with record-high equity, waiting out potentially lower rates later in the year may not be worth it," Skylar Olsen, chief economist at Zillow, said in a statement.