Steady demand is keeping the heat turned up, but early signs
point to a late-summer seasonal cooldown
- Houses are spending more time on the market than in the spring,
but still half as long as in 2019.
- Buyers still have few choices for existing homes as inventory
reached new record lows for July.
- Home values rose from June to July in every major metro area
except Austin.
SEATTLE, Aug. 10,
2023 /PRNewswire/ -- A warmer-than-normal housing
market is showing signs of a typical late-summer seasonal cooldown,
according to the latest Zillow® market report.1
Competition is still strong, with inventory hitting new lows for
this time of year, but buyers have a bit more time to find and
consider their big purchase.
"The housing market is returning to normal seasonal patterns,
and that's a positive sign for buyers who faced stiff competition
this spring," said Zillow senior economist Nicole Bachaud. "As summer winds down and kids
head back to school, home shopping gets put on the back burner.
Traditionally, buyers who remain in the market gain a bit more
bargaining power heading into the fall. This year, however, sellers
are sticking to the sidelines, which means even fewer options and
high prices."
The typical U.S. home value climbed 0.9% from June to July — a
steamy pace for this time of year, but a step back from 1.4% growth
in the two preceding months. The nation's typical home value is now
$349,679,2 which is 1.4%
higher than last July and 46% above pre-pandemic levels in February
2020.
Austin was the lone major
market in which home values dipped from June to July, falling 0.5%.
The slowest monthly home value growth was in San Antonio (0.2%), Denver (0.2%), Birmingham (0.3%) and
Memphis (0.3%).
Slowing sales give buyers a bit of breathing
room
Easing monthly appreciation is one sign that the normal
seasonal pendulum of the market is swinging back in favor of
buyers. Homes are also spending longer on the market before going
under contract — 12 days in July compared to 11 in June and 10 in
April and May. That's still half as long as in 2019.
The volume of newly pending sales also slowed down along
seasonal trend lines, falling about 6.5% from June to July. Sales
of existing homes, constrained by affordability challenges and a
lack of homes on the market, are down about 15% year over
year.
The number of listings with a price cut ticked up slightly from
June as well. The share is right in line with pre-pandemic norms at
about 22%.
Inventory drought marches on amidst high mortgage
rates
Total active inventory in July was down 15% from last
year and a tremendous 44% below July
2019 levels.
"Buyers should not expect to see many more homes available for
sale on Zillow at any time this year than they do now," Bachaud
said. "Inventory will decline from here if it follows pre-pandemic
trends."
Homeowners are stubbornly holding on to their houses. New
listings of existing homes once again set a new seasonal low-water
mark, as roughly 336,000 came to market in July. That's 26% fewer
than last July and 41% below pre-pandemic averages, and is closer
to what typically comes online in a frosty January.
New listings have been scarce for a year now, and the most
likely cause — high mortgage rates — remains. A recent Zillow
survey found some evidence that the gap between homeowners'
existing mortgage rates and today's rates can help explain their
reluctance to sell: Owners with a rate of 5.0% or above were almost
twice as likely to consider selling their homes in the next three
years than those with a rate below 5%. That doesn't mean rates need
to return all the way to 5%, but that the lower they go, the more
homeowners will be willing to entertain the idea of selling their
homes to move.
Builders are helping bridge the inventory gap, ramping up new
home sales now that it's clear the supply of existing homes
isn't meeting demand. Builders are also getting more creative in
order to offer buyers an affordable product, turning to smaller
homes, more townhouses, and interest-rate buydowns.
Rents are climbing slightly faster than normal for
July
After its own record-breaking run that saw annual rent
price growth peak at 16% in February of 2022, the rental market is
also falling back into more normal long-term patterns of growth,
according to Zillow's latest rental market report. July's 0.5%
monthly rent growth was slightly hotter than pre-pandemic averages,
but year-over-year growth of 3.6% was a touch cooler.
Metropolitan
Area*
|
July Zillow Home
Value Index (ZHVI) (Raw)
|
ZHVI Change, Month
over Month (YoY)
|
Monthly Mortgage
Payment (20% Down)
|
Monthly Mortgage
Payment Change Since July 2019
|
Newly Pending Sales
Change, YoY
|
New Inventory
Change, YoY
|
Total Inventory
Change, YoY
|
United
States
|
$349,679
|
1.4 %
|
$1,817
|
108 %
|
-14.5 %
|
-25.7 %
|
-14.8 %
|
New York, NY
|
$624,089
|
3.7 %
|
$3,230
|
84 %
|
-21.5 %
|
-35.0 %
|
-30.3 %
|
Los Angeles,
CA
|
$906,524
|
-0.5 %
|
$4,643
|
95 %
|
-14.2 %
|
-28.3 %
|
-29.7 %
|
Chicago, IL
|
$308,628
|
3.7 %
|
$1,600
|
85 %
|
-12.6 %
|
-25.8 %
|
-27.8 %
|
Dallas, TX
|
$374,688
|
-2.9 %
|
$1,950
|
103 %
|
-14.4 %
|
-23.8 %
|
0.7 %
|
Houston, TX
|
$304,919
|
-1.1 %
|
$1,588
|
98 %
|
-8.2 %
|
-22.7 %
|
0.4 %
|
Washington,
DC
|
$544,832
|
1.3 %
|
$2,829
|
82 %
|
-21.1 %
|
-30.7 %
|
-34.6 %
|
Philadelphia,
PA
|
$348,838
|
5.3 %
|
$1,809
|
101 %
|
-21.9 %
|
-23.2 %
|
-24.4 %
|
Miami, FL
|
$462,470
|
5.3 %
|
$2,393
|
128 %
|
-6.7 %
|
-25.1 %
|
-1.5 %
|
Atlanta, GA
|
$375,981
|
-0.3 %
|
$1,953
|
122 %
|
-21.4 %
|
-28.1 %
|
-17.2 %
|
Boston, MA
|
$662,736
|
1.7 %
|
$3,430
|
87 %
|
-29.5 %
|
-33.3 %
|
-32.1 %
|
Phoenix, AZ
|
$447,505
|
-6.1 %
|
$2,322
|
114 %
|
-13.2 %
|
-47.8 %
|
-37.8 %
|
San Francisco,
CA
|
$1,128,118
|
-5.0 %
|
$5,833
|
77 %
|
-12.5 %
|
-30.2 %
|
-35.0 %
|
Riverside,
CA
|
$557,401
|
-2.2 %
|
$2,891
|
104 %
|
-16.2 %
|
-32.4 %
|
-28.7 %
|
Detroit, MI
|
$246,107
|
3.8 %
|
$1,279
|
94 %
|
-14.5 %
|
-24.9 %
|
-24.8 %
|
Seattle, WA
|
$707,877
|
-2.1 %
|
$3,662
|
95 %
|
-23.1 %
|
-35.6 %
|
-38.5 %
|
Minneapolis,
MN
|
$374,213
|
-0.3 %
|
$1,951
|
81 %
|
-14.6 %
|
-25.0 %
|
-20.3 %
|
San Diego,
CA
|
$893,477
|
-0.9 %
|
$4,603
|
105 %
|
-12.8 %
|
-33.9 %
|
-38.9 %
|
Tampa, FL
|
$375,809
|
-1.7 %
|
$1,955
|
132 %
|
-8.7 %
|
-25.6 %
|
-9.4 %
|
Denver, CO
|
$584,192
|
-2.2 %
|
$3,034
|
85 %
|
-7.7 %
|
-23.4 %
|
-12.6 %
|
Baltimore,
MD
|
$373,732
|
4.6 %
|
$1,945
|
85 %
|
-22.1 %
|
-30.7 %
|
-28.2 %
|
St. Louis,
MO
|
$244,279
|
4.1 %
|
$1,267
|
99 %
|
-9.6 %
|
-14.3 %
|
-11.1 %
|
Orlando, FL
|
$390,428
|
0.0 %
|
$2,031
|
115 %
|
-14.4 %
|
-26.7 %
|
-13.5 %
|
Charlotte,
NC
|
$372,347
|
0.2 %
|
$1,929
|
127 %
|
-63.5 %
|
-39.0 %
|
-13.3 %
|
San Antonio,
TX
|
$293,323
|
-1.7 %
|
$1,531
|
104 %
|
-19.2 %
|
-26.9 %
|
13.4 %
|
Portland, OR
|
$547,803
|
-1.9 %
|
$2,850
|
87 %
|
-19.5 %
|
-30.7 %
|
-20.0 %
|
Sacramento,
CA
|
$568,342
|
-3.9 %
|
$2,943
|
86 %
|
-16.4 %
|
-35.2 %
|
-37.3 %
|
Pittsburgh,
PA
|
$208,599
|
1.5 %
|
$1,083
|
88 %
|
-14.8 %
|
-24.4 %
|
-18.4 %
|
Cincinnati,
OH
|
$274,843
|
5.0 %
|
$1,427
|
107 %
|
-22.9 %
|
-28.9 %
|
-26.4 %
|
Austin, TX
|
$477,502
|
-10.4 %
|
$2,499
|
110 %
|
-9.0 %
|
-34.7 %
|
-2.5 %
|
Las Vegas,
NV
|
$405,012
|
-6.0 %
|
$2,100
|
86 %
|
-4.5 %
|
-49.8 %
|
-41.6 %
|
Kansas City,
MO
|
$295,321
|
5.0 %
|
$1,533
|
107 %
|
-12.8 %
|
-21.1 %
|
-17.4 %
|
Columbus, OH
|
$306,732
|
4.1 %
|
$1,591
|
108 %
|
-19.3 %
|
-26.4 %
|
-21.4 %
|
Indianapolis,
IN
|
$272,561
|
2.6 %
|
$1,417
|
118 %
|
-21.1 %
|
-25.5 %
|
-15.1 %
|
Cleveland,
OH
|
$218,987
|
4.0 %
|
$1,137
|
98 %
|
-16.1 %
|
-28.2 %
|
-22.2 %
|
San Jose, CA
|
$1,463,906
|
-2.3 %
|
$7,461
|
85 %
|
110.2 %
|
-33.6 %
|
-44.1 %
|
Nashville,
TN
|
$435,670
|
-2.2 %
|
$2,266
|
120 %
|
-21.0 %
|
-36.3 %
|
-10.1 %
|
Virginia Beach,
VA
|
$337,642
|
3.5 %
|
$1,755
|
93 %
|
-22.6 %
|
-21.2 %
|
-22.6 %
|
Providence,
RI
|
$454,639
|
2.6 %
|
$2,359
|
101 %
|
-31.4 %
|
-32.4 %
|
-33.7 %
|
Jacksonville,
FL
|
$355,647
|
-1.7 %
|
$1,856
|
123 %
|
-11.2 %
|
-30.2 %
|
0.4 %
|
Milwaukee,
WI
|
$331,480
|
5.2 %
|
$1,723
|
87 %
|
-6.8 %
|
-27.3 %
|
-28.4 %
|
Oklahoma City,
OK
|
$228,796
|
3.9 %
|
$1,192
|
107 %
|
-18.4 %
|
-24.5 %
|
-1.7 %
|
Raleigh, NC
|
$433,688
|
-2.5 %
|
$2,255
|
113 %
|
-22.7 %
|
-37.3 %
|
-28.8 %
|
Memphis, TN
|
$235,979
|
0.4 %
|
$1,232
|
116 %
|
-24.1 %
|
-16.5 %
|
3.5 %
|
Richmond, VA
|
$355,308
|
5.4 %
|
$1,845
|
107 %
|
-27.3 %
|
-33.1 %
|
-32.0 %
|
Louisville,
KY
|
$251,541
|
2.9 %
|
$1,311
|
93 %
|
-0.2 %
|
-24.9 %
|
-20.9 %
|
New Orleans,
LA
|
$244,685
|
-1.7 %
|
$1,271
|
75 %
|
2.6 %
|
-19.5 %
|
18.1 %
|
Salt Lake City,
UT
|
$533,648
|
-1.8 %
|
$2,773
|
109 %
|
-14.1 %
|
-28.1 %
|
-18.6 %
|
Hartford, CT
|
$340,662
|
5.7 %
|
$1,757
|
91 %
|
-21.2 %
|
-22.1 %
|
-23.3 %
|
Buffalo, NY
|
$252,443
|
2.2 %
|
$1,313
|
98 %
|
-21.0 %
|
-20.4 %
|
-19.8 %
|
Birmingham,
AL
|
$249,721
|
1.9 %
|
$1,304
|
108 %
|
-22.7 %
|
-27.4 %
|
-8.4 %
|
|
|
*
|
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
|
The originally
published ZHVI figure of $350,213 for June has since been restated
to $346,730.
|
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is reimagining real estate to make home a
reality for more and more people. As the most visited real estate
website in the United States,
Zillow and its affiliates help people find and get the home they
want by connecting them with digital solutions, great partners, and
easier buying, selling, financing and renting
experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®; Zillow Premier Agent®; Zillow Home Loans℠; Trulia®; Out
East®; StreetEasy®; HotPads®; and ShowingTime+℠, which
includes ShowingTime®, Bridge Interactive®, and dotloop®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
(ZFIN)
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SOURCE Zillow