There are signs a market rebalancing could be around the
corner, but for now, the market is moving at record speed
- U.S. home values continue to grow at a record pace, up 20.9% in
the past year. The combination of rising prices and a spike in
mortgage rates means the monthly mortgage payment on a typical home
is 52.5% higher than it would have been a year ago.
- Rising costs have not yet eased competition. Homes are selling
as fast as they ever have — after only seven days for the typical
home — and nearly half of homes are selling for above their list
price.
- There are faint signs the market is starting to rebalance,
including growing inventory and a rise in listings with a price
cut.
SEATTLE, May 19, 2022
/PRNewswire/ -- The housing market is as competitive as ever,
according to the latest Zillow® Real Estate Market
Report.i Buyer demand has been strong enough to
keep the market moving at a record pace, even after a massive spike
in mortgage rates.
Year-over-year home value growth set a record for the 13th
consecutive month in April. The typical U.S. home is worth
$344,141, 20.9% higher than a year
ago. That record pace of growth comes despite rising mortgage rates
eating away at what home buyers can afford. The monthly mortgage
payment on the typical U.S. home is 11.7% higher than it would have
been in March, and 52.5% higher than a year ago, assuming a 30-year
mortgage with a 20% down payment.ii
"We do expect the market to begin rebalancing this spring as
rising costs keep enough would-be buyers on the sidelines for
inventory to begin catching up with demand, but we have not yet
reached that point," said Nicole
Bachaud, Zillow economist. "Nearly half of homes are selling
above their list price, and April sales happened as fast as we've
ever recorded. It may very well be that fewer people are trying to
buy, but with bidding wars continuing to drive up prices on limited
inventory, those in the market today likely won't feel much
relief."
To keep monthly mortgage costs the same as they would have been
a year ago, today's buyers must shop in a different price range.
According to estimates from Zillow's mortgage calculator, a buyer
who can afford a monthly mortgage payment of $1,500 could have paid roughly $340,000 for a house a year ago, when mortgage
rates were much lower. Today, that $1,500 monthly payment could buy a house worth
about $275,000. And that is before
factoring in home value growth of more than 20% during that
time; a buyer would have paid about $227,500 a year ago for that $275,000 home.iii
Rising costs have not yet eased competition. Homes that sold in
April typically went pending after only seven days, tying a monthly
record set last May and June. To put that remarkable market speed
into perspective, in April 2019, the
last spring before the pandemic, the typical home sat on the market
for 24 days before an offer was accepted.
Nearly half (48%) of homes that were purchased in March — the
latest data available — sold for more than the asking price,
indicating the buyer expected multiple bidders. That's up from
37.5% in March 2021. More than
three-quarters of homes are selling above list price in the
country's most competitive markets: San
Francisco (80.4%), Seattle
(77.3%) and San Jose
(76.1%).
Faint signs are starting to emerge that a more balanced
market is around the corner. The share of listings with a
price cut crept up to 9.1%, higher than 8.6% in March and 7.8% last
April. That may be a sign that sellers cannot be quite as ambitious
in their pricing strategy as they could have been in recent
months.
Inventory continues to rise as well, up 5.5% from March — the
second straight month of growth. The year-over-year inventory
deficit has also shrunk in each of the past three months, now
sitting at -19.5%.
More inventory is both the consequence and the cause of a more
balanced housing market: It limits the number of buyers bidding on
each home as there are more to choose from, and it prompts sellers
to price their home competitively.
Zillow's home value forecast now calls for 11.6% growth
through April 2023, down from a
year-ahead forecast of 14.9% made in March. Zillow's forecast for
existing home sales has been lowered as well, now predicting 5.73
million sales in 2022. That would mark a 6.4% decrease from 2021.
Spiking mortgage rates, inventory gains, and lower-than-expected
pending home sales and mortgage application data drove the downward
revision.
These downwardly revised projections would still represent a
very strong housing market in the coming year. Other than this
recent run of record-breaking home value growth, only during a
short stretch in 2005 have home values grown faster than 11.6%
annually in the history of the Zillow Home Value Index. And while
5.73 million existing home sales would be a decrease from a
remarkably strong 2021, that would mark the second-best calendar
year total since 2006.
The pace of annual rent growth slowed for the second consecutive
month. Rents are up 16.4% year over year, down from 17% annual
growth in March. The typical U.S. rental unit costs $1,927 a month.
Metropolitan
Area*
|
Zillow
Home
Value
Index
(ZHVI)
|
ZHVI
YoY
Change
|
Monthly
Mortgage
Payment
on a
Typical
Home**
|
Monthly
Mortgage
Payment
on a
Typical
Home
YoY
Change
|
Median
Days to
Pending
|
Share
of
Homes
Sold
Above
List
(March
2022)
|
Zillow
Observed
Rent
Index
(ZORI)
|
ZORI
YoY
Change
|
United
States
|
$344,141
|
20.9%
|
$1,475
|
52.5%
|
7
|
48.0%
|
$1,927
|
16.4%
|
New York, NY
|
$600,354
|
12.7%
|
$2,573
|
42.2%
|
22
|
46.7%
|
$3,004
|
20.5%
|
Los Angeles,
CA
|
$932,783
|
20.9%
|
$3,998
|
52.4%
|
10
|
69.9%
|
$2,864
|
16.1%
|
Chicago, IL
|
$305,282
|
14.3%
|
$1,308
|
44.1%
|
7
|
36.7%
|
$1,883
|
11.4%
|
Dallas–Fort Worth,
TX
|
$381,089
|
30.1%
|
$1,633
|
64.1%
|
8
|
63.0%
|
$1,750
|
17.9%
|
Philadelphia,
PA
|
$327,347
|
13.7%
|
$1,403
|
43.4%
|
7
|
45.7%
|
$1,822
|
11.6%
|
Houston, TX
|
$299,998
|
22.5%
|
$1,286
|
54.5%
|
8
|
41.3%
|
$1,550
|
12.6%
|
Washington,
DC
|
$550,917
|
11.0%
|
$2,361
|
39.9%
|
5
|
54.8%
|
$2,174
|
12.2%
|
Miami–Fort Lauderdale,
FL
|
$430,068
|
28.1%
|
$1,843
|
61.6%
|
12
|
31.2%
|
$2,846
|
31.7%
|
Atlanta, GA
|
$367,946
|
30.4%
|
$1,577
|
64.4%
|
6
|
54.4%
|
$1,904
|
17.4%
|
Boston, MA
|
$649,034
|
15.1%
|
$2,782
|
45.1%
|
6
|
62.5%
|
$2,762
|
12.0%
|
San Francisco,
CA
|
$1,489,691
|
20.1%
|
$6,385
|
51.5%
|
9
|
80.4%
|
$3,157
|
10.4%
|
Detroit, MI
|
$238,278
|
15.3%
|
$1,021
|
45.4%
|
5
|
45.5%
|
$1,405
|
11.2%
|
Riverside,
CA
|
$578,174
|
27.6%
|
$2,478
|
60.9%
|
9
|
62.7%
|
$2,584
|
16.9%
|
Phoenix, AZ
|
$466,170
|
30.9%
|
$1,998
|
65.1%
|
7
|
50.5%
|
$1,911
|
21.6%
|
Seattle, WA
|
$791,933
|
25.7%
|
$3,394
|
58.5%
|
5
|
77.3%
|
$2,206
|
16.0%
|
Minneapolis–St. Paul,
MN
|
$374,074
|
12.7%
|
$1,603
|
42.1%
|
8
|
53.8%
|
$1,624
|
6.6%
|
San Diego,
CA
|
$923,350
|
28.0%
|
$3,957
|
61.4%
|
7
|
70.2%
|
$2,946
|
20.0%
|
St. Louis,
MO
|
$239,028
|
15.3%
|
$1,024
|
45.4%
|
5
|
51.5%
|
$1,263
|
11.0%
|
Tampa, FL
|
$366,059
|
35.1%
|
$1,569
|
70.3%
|
5
|
48.0%
|
$2,055
|
26.9%
|
Baltimore,
MD
|
$372,061
|
11.4%
|
$1,595
|
40.4%
|
5
|
46.9%
|
$1,776
|
10.7%
|
Denver, CO
|
$639,316
|
24.6%
|
$2,740
|
57.2%
|
5
|
69.5%
|
$1,940
|
15.1%
|
Pittsburgh,
PA
|
$211,973
|
14.2%
|
$909
|
44.0%
|
8
|
33.7%
|
$1,323
|
8.1%
|
Portland, OR
|
$581,400
|
19.3%
|
$2,492
|
50.4%
|
5
|
62.7%
|
$1,821
|
12.6%
|
Charlotte,
NC
|
$372,300
|
30.8%
|
$1,596
|
64.9%
|
4
|
57.8%
|
$1,738
|
17.4%
|
Sacramento,
CA
|
$616,124
|
21.8%
|
$2,641
|
53.6%
|
7
|
67.3%
|
$2,233
|
12.3%
|
San Antonio,
TX
|
$329,532
|
25.5%
|
$1,412
|
58.2%
|
7
|
49.8%
|
$1,441
|
15.3%
|
Orlando, FL
|
$376,474
|
31.7%
|
$1,614
|
66.1%
|
5
|
45.1%
|
$1,999
|
23.7%
|
Cincinnati,
OH
|
$255,392
|
15.5%
|
$1,095
|
45.7%
|
3
|
44.4%
|
$1,412
|
11.3%
|
Cleveland,
OH
|
$212,605
|
15.9%
|
$911
|
46.2%
|
5
|
45.0%
|
$1,344
|
11.3%
|
Kansas City,
MO
|
$283,085
|
16.2%
|
$1,213
|
46.5%
|
3
|
53.7%
|
$1,338
|
11.1%
|
Las Vegas,
NV
|
$437,478
|
33.3%
|
$1,875
|
68.1%
|
6
|
50.6%
|
$1,851
|
21.3%
|
Columbus, OH
|
$290,400
|
17.1%
|
$1,245
|
47.7%
|
3
|
58.2%
|
$1,430
|
12.2%
|
Indianapolis,
IN
|
$263,495
|
20.5%
|
$1,129
|
52.0%
|
4
|
48.2%
|
$1,457
|
13.7%
|
San Jose, CA
|
$1,710,404
|
25.2%
|
$7,331
|
57.8%
|
8
|
76.1%
|
$3,199
|
12.4%
|
Austin, TX
|
$594,441
|
37.6%
|
$2,548
|
73.6%
|
11
|
61.7%
|
$1,823
|
20.0%
|
Virginia Beach,
VA
|
$317,835
|
14.4%
|
$1,362
|
44.2%
|
13
|
57.1%
|
$1,584
|
12.3%
|
Nashville,
TN
|
$433,158
|
32.8%
|
$1,857
|
67.5%
|
4
|
55.2%
|
$1,802
|
18.9%
|
Providence,
RI
|
$438,168
|
16.8%
|
$1,878
|
47.2%
|
7
|
59.1%
|
$1,900
|
15.0%
|
Milwaukee,
WI
|
$267,887
|
12.0%
|
$1,148
|
41.3%
|
22
|
55.2%
|
$1,242
|
7.3%
|
Jacksonville,
FL
|
$355,286
|
32.4%
|
$1,523
|
67.0%
|
5
|
43.4%
|
$1,748
|
20.4%
|
Memphis, TN
|
$224,616
|
21.2%
|
$963
|
52.8%
|
9
|
49.6%
|
$1,526
|
14.2%
|
Oklahoma City,
OK
|
$210,799
|
18.2%
|
$903
|
49.0%
|
4
|
45.5%
|
$1,318
|
12.3%
|
Louisville,
KY
|
$236,137
|
14.1%
|
$1,012
|
43.9%
|
5
|
34.3%
|
$1,274
|
11.2%
|
Hartford, CT
|
$312,123
|
14.5%
|
$1,338
|
44.4%
|
6
|
59.5%
|
$1,590
|
11.3%
|
Richmond, VA
|
$320,654
|
13.2%
|
$1,374
|
42.8%
|
5
|
63.1%
|
$1,539
|
13.4%
|
New Orleans,
LA
|
$264,185
|
14.2%
|
$1,132
|
44.0%
|
6
|
34.2%
|
$1,503
|
16.9%
|
Buffalo, NY
|
$241,651
|
18.8%
|
$1,036
|
49.8%
|
9
|
63.3%
|
$1,232
|
9.9%
|
Raleigh, NC
|
$445,219
|
36.4%
|
$1,908
|
72.0%
|
4
|
70.2%
|
$1,706
|
17.7%
|
Birmingham,
AL
|
$234,645
|
17.7%
|
$1,006
|
48.4%
|
7
|
54.5%
|
$1,302
|
11.5%
|
Salt Lake City,
UT
|
$602,765
|
28.8%
|
$2,583
|
62.4%
|
5
|
66.6%
|
$1,646
|
19.1%
|
*Table ordered by
market size
|
**Principal and
interest only, assuming a 30-year fixed-rate mortgage with a 20%
down payment
|
|
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).
i 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. The data in the Zillow Real Estate
Market Report is aggregated from public sources by a number of data
providers for 931 metropolitan and micropolitan areas, dating back
to 2000. All current monthly data at the national, state, metro,
city, ZIP code and neighborhood levels can be accessed at
www.zillow.com/research/data.
ii Principal and interest only. Property taxes,
homeowners insurance and other additional costs are not
included.
iii Estimated monthly mortgage payments in this
example assume a 20% down payment, a property tax rate of 0.88%,
annual home insurance costs of $1,260
and no HOA dues. Freddie Mac Primary Mortgage Market Survey data
were used to estimate prevailing mortgage rates during each
period.
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SOURCE Zillow