Competition is easing as inventory accumulates, leading the
market back toward 'normal'
- U.S. home values fell 0.1% from June to July, the first decline
in the raw Zillow Home Value Index since 2012. Home values fell
last month in 30 of the 50 largest metro areas, but are still up
16% from a year ago.
- Rising inventory is being driven by homes lingering on the
market and new listings trailing pre-pandemic levels. It took 10
days for a listing to go pending in July, two days longer than in
June.
- Rent appreciation is slowing, but the growth rate remains much
higher than pre-pandemic levels.
SEATTLE, Aug. 18,
2022 /PRNewswire/ -- After two years of unprecedented
growth, home values fell slightly from June to July, according to
the latest market report1 from Zillow®. The market
is quickly rebalancing. With buyers' purchasing power diminished by
nearly two years of double-digit price growth and higher mortgage
rates, competition for homes is dropping off.
The typical U.S. home value declined by 0.1% ($366) month over month in July and now stands at
$357,107, as measured by the
raw2 Zillow Home Value Index (ZHVI). Monthly growth in
this metric has relaxed since reaching a recent peak of 1.9% in
April, slowing to 1.2% growth in May and 0.8% growth in June. It's
not unusual for home price growth to decelerate this time of year,
but the small decline is the first monthly dip since 2012. The
nation's typical home value is up 16% year over year and 44.5%
since July 2019.
"Home values flattening so quickly after recent record growth
might surprise, but it's a badly needed rebalancing that gives home
buyers more options, more time to shop and more negotiating power,"
said Zillow chief economist Skylar
Olsen. "This slowdown is about discouraged buyers pulling
back after the affordability shock from higher rates. As prices
soften, many will renew their interest, and we will continue our
progress back to 'normal.' With buyers ready in the wings once
confidence returns, homeowners can expect to keep the majority of
the equity gains they've seen in the last two years."
Home values measured by raw ZHVI fell from June to July in 30 of
the 50 largest metro areas, an increase from 13 the previous month.
The largest monthly home value declines were in San Jose (-4.5%) and San Francisco (-2.8%) — the nation's most
expensive major markets — followed by Phoenix (-2.8%) and Austin (-2.7%), which saw the most extreme
growth over the pandemic. Values rose the most since June in
Miami (1.5%), Richmond (1%) and Memphis (0.9%), although monthly growth has
decelerated in these markets.
Home shoppers still on the hunt have more time to find and
consider their options, and have a better chance of seeing price
cuts. Listings' median days to pending jumped by two days in July
to 10 — still nearly two weeks less than in July 2019. Among major metros, typical time on
market is rising fastest in Austin, Phoenix and San
Jose. A wide swath of sellers are adjusting pricing to meet
buyers' expectations, as the share of listings with a price cut
grew to 18.6% in July, a few percentage points higher than in July
2019.
Homes lingering on the market are driving for-sale inventory up
at a fast clip. Inventory is up 5.1% on a monthly basis, yet new
inventory fell 13.6% month over month in July. Compared to
July 2019, 15.5% fewer new listings
came on the market. This new inventory figure does not include new
construction, so it represents current homeowners deciding not to
list their homes.
While total inventory is rising quickly, it still stands 43.5%
below July 2019. Low inventory is a
key reason Zillow economists do not expect home prices to fall
significantly.
"Inventory, the pool of homes available during a given window,
is very responsive to easing demand and slowing sales, this year
posting the largest month-over-month seasonal increases for any
May, June or July ever recorded," said Olsen. "The flow of homes
into the market, however, is slowing. High interest rates are
likely keeping current homeowners from deciding to list, as they
compare their current rate — and home — against what can be found
on the market, keeping inventory far below pre-pandemic norms
despite the slowdown in sales."
Typical monthly rent in the U.S. is now $2,031. After a rapid run-up that peaked in
February, rent hikes appear to be stabilizing, easing to 0.6%
month-over-month growth in July after seeing higher volatility
through much of 2021. Although growth is decelerating, the annual
growth rate is still more than three times that of July 2019.
Among major metros, the most significant slowdowns in monthly
rent growth since July of last year occurred in Las Vegas (from 3.6% to -0.2%), Phoenix (3.5% to -0.3%), Tampa (3.9% to 0.3%), and Austin (3.8% to 0.7%).
Metropolitan
Area*
|
July Zillow Home
Value Index (ZHVI) (Raw)
|
July ZHVI
Month-over- Month (MoM) Change (Raw)
|
ZHVI Cumulative
Change since July 2019 (Raw)
|
Share of Listings
with a Price Cut
|
ZIllow Observed Rent
Index (ZORI)
|
Zillow Observed Rent
Index MoM Change
|
United
States
|
$357,107
|
-0.1 %
|
44.5 %
|
18.6 %
|
$2,031
|
0.6 %
|
New York, NY
|
$621,308
|
0.3 %
|
28.9 %
|
12.8 %
|
$3,246
|
1.2 %
|
Los Angeles,
CA
|
$929,753
|
-0.4 %
|
41.0 %
|
17.8 %
|
$2,964
|
0.5 %
|
Chicago, IL
|
$314,179
|
-0.3 %
|
29.0 %
|
20.4 %
|
$1,932
|
0.7 %
|
Dallas–Fort Worth,
TX
|
$396,904
|
-1.1 %
|
55.4 %
|
22.0 %
|
$1,834
|
0.6 %
|
Philadelphia,
PA
|
$339,731
|
0.2 %
|
36.2 %
|
18.1 %
|
$1,844
|
0.7 %
|
Houston, TX
|
$313,999
|
0.1 %
|
42.3 %
|
20.9 %
|
$1,602
|
0.2 %
|
Washington,
DC
|
$554,381
|
-0.5 %
|
28.3 %
|
18.8 %
|
$2,278
|
0.7 %
|
Miami–Fort Lauderdale,
FL
|
$476,138
|
1.5 %
|
58.2 %
|
16.0 %
|
$2,841
|
0.4 %
|
Atlanta, GA
|
$383,509
|
-0.3 %
|
58.7 %
|
20.3 %
|
$1,980
|
0.8 %
|
Boston, MA
|
$660,230
|
-0.7 %
|
34.9 %
|
14.7 %
|
$2,834
|
1.0 %
|
San Francisco,
CA
|
$1,436,044
|
-2.8 %
|
29.3 %
|
17.5 %
|
$3,277
|
0.5 %
|
Detroit, MI
|
$242,273
|
-1.2 %
|
34.4 %
|
18.4 %
|
$1,467
|
0.5 %
|
Riverside,
CA
|
$580,593
|
-2.4 %
|
53.2 %
|
23.0 %
|
$2,612
|
0.5 %
|
Phoenix, AZ
|
$470,800
|
-2.8 %
|
69.5 %
|
28.8 %
|
$1,921
|
-0.3 %
|
Seattle, WA
|
$779,350
|
-0.3 %
|
52.2 %
|
25.6 %
|
$2,346
|
0.5 %
|
Minneapolis–St. Paul,
MN
|
$375,933
|
-1.0 %
|
29.1 %
|
17.6 %
|
$1,651
|
-0.1 %
|
San Diego,
CA
|
$894,246
|
-2.5 %
|
50.0 %
|
23.6 %
|
$3,126
|
1.2 %
|
St. Louis,
MO
|
$244,022
|
-0.5 %
|
34.3 %
|
15.5 %
|
$1,308
|
0.4 %
|
Tampa, FL
|
$389,519
|
0.6 %
|
74.3 %
|
24.7 %
|
$2,118
|
0.3 %
|
Baltimore,
MD
|
$378,970
|
0.1 %
|
27.1 %
|
17.9 %
|
$1,811
|
-0.1 %
|
Denver, CO
|
$630,141
|
-1.8 %
|
43.5 %
|
26.3 %
|
$2,021
|
0.0 %
|
Pittsburgh,
PA
|
$211,239
|
-0.7 %
|
31.4 %
|
20.0 %
|
$1,349
|
0.4 %
|
Portland, OR
|
$573,768
|
-1.7 %
|
37.7 %
|
23.5 %
|
$1,941
|
0.4 %
|
Charlotte,
NC
|
$390,944
|
0.3 %
|
64.8 %
|
21.3 %
|
$1,815
|
0.8 %
|
Sacramento,
CA
|
$611,287
|
-2.5 %
|
45.4 %
|
27.5 %
|
$2,309
|
0.5 %
|
San Antonio,
TX
|
$340,131
|
-0.5 %
|
45.9 %
|
20.9 %
|
$1,512
|
0.8 %
|
Orlando, FL
|
$403,394
|
0.5 %
|
59.1 %
|
20.0 %
|
$2,063
|
0.3 %
|
Cincinnati,
OH
|
$262,353
|
-0.6 %
|
40.9 %
|
17.4 %
|
$1,436
|
1.3 %
|
Cleveland,
OH
|
$221,357
|
0.0 %
|
40.6 %
|
16.1 %
|
$1,361
|
-0.7 %
|
Kansas City,
MO
|
$288,359
|
-0.2 %
|
40.1 %
|
15.3 %
|
$1,383
|
1.0 %
|
Las Vegas,
NV
|
$450,931
|
-1.4 %
|
54.8 %
|
28.6 %
|
$1,877
|
-0.2 %
|
Columbus, OH
|
$303,834
|
0.6 %
|
43.4 %
|
16.6 %
|
$1,493
|
1.2 %
|
Indianapolis,
IN
|
$272,815
|
0.0 %
|
48.8 %
|
18.4 %
|
$1,510
|
0.9 %
|
San Jose, CA
|
$1,559,455
|
-4.5 %
|
29.2 %
|
19.5 %
|
$3,369
|
1.0 %
|
Austin, TX
|
$566,533
|
-2.7 %
|
70.4 %
|
25.2 %
|
$1,929
|
0.7 %
|
Virginia Beach,
VA
|
$331,311
|
0.8 %
|
34.8 %
|
14.1 %
|
$1,641
|
0.8 %
|
Nashville,
TN
|
$460,734
|
0.1 %
|
62.2 %
|
23.5 %
|
$1,888
|
0.3 %
|
Providence,
RI
|
$452,906
|
-0.7 %
|
42.2 %
|
15.3 %
|
$1,966
|
-0.7 %
|
Milwaukee,
WI
|
$271,982
|
-0.2 %
|
35.3 %
|
10.2 %
|
$1,241
|
1.1 %
|
Jacksonville,
FL
|
$379,196
|
0.5 %
|
63.7 %
|
23.9 %
|
$1,784
|
0.5 %
|
Memphis, TN
|
$235,511
|
0.9 %
|
51.0 %
|
14.4 %
|
$1,530
|
-0.4 %
|
Oklahoma City,
OK
|
$220,029
|
0.5 %
|
39.5 %
|
18.0 %
|
$1,343
|
0.5 %
|
Louisville,
KY
|
$242,542
|
0.0 %
|
35.6 %
|
19.6 %
|
$1,311
|
1.2 %
|
Hartford, CT
|
$324,265
|
-0.4 %
|
36.4 %
|
13.6 %
|
$1,680
|
0.9 %
|
Richmond, VA
|
$338,875
|
1.0 %
|
35.4 %
|
13.7 %
|
$1,631
|
1.1 %
|
New Orleans,
LA
|
$272,694
|
0.1 %
|
33.8 %
|
23.0 %
|
$1,531
|
0.1 %
|
Buffalo, NY
|
$249,777
|
0.3 %
|
43.5 %
|
13.2 %
|
$1,266
|
1.1 %
|
Raleigh, NC
|
$457,006
|
-2.5 %
|
62.3 %
|
19.7 %
|
$1,786
|
0.8 %
|
Birmingham,
AL
|
$246,532
|
-0.1 %
|
41.0 %
|
16.2 %
|
$1,369
|
0.7 %
|
Salt Lake City,
UT
|
$595,794
|
-1.2 %
|
56.0 %
|
32.5 %
|
$1,702
|
-0.2 %
|
|
|
*
|
Table ordered by
market size
|
|
|
1
|
The Zillow Real Estate
Market Report is a monthly overview of the national and local real
estate markets. The reports are compiled by Zillow Research. For
more information, visit www.zillow.com/research.
|
|
|
2
|
Home value figures in
the July 2022 Zillow market report represent the raw version of the
Zillow Home Value Index. All previous Zillow market reports have
used the smoothed and seasonally adjusted version of the Zillow
Home Value Index. The smoothed and seasonally adjusted version
smooths home value changes over the trailing three months, which
shows a cleaner trend line without the month-to-month spikes of the
raw series. Zillow Research has chosen to present the raw version
during this period of unparalleled volatility. For reference, the
smoothed and seasonally adjusted version of ZHVI shows a 0.7%
month-over-month gain in July. The full series of all ZHVI
versions, including geographic cuts down to the ZIP code level, are
available for download at
https://www.zillow.com/research/data/.
|
About Zillow
Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate
to make it easier to unlock life's next chapter. As the most
visited real estate website in the United
States, Zillow® and its affiliates offer customers an
on-demand experience for selling, buying, renting or financing with
transparency and ease.
Zillow Group's affiliates and subsidiaries include Zillow®,
Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing
Services™, Trulia®, Out East®, ShowingTime®, Bridge Interactive®,
dotloop®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an
Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
View original content to download
multimedia:https://www.prnewswire.com/news-releases/buyers-gaining-time-and-options-as-housing-market-rebalances-301608167.html
SOURCE Zillow