SEATTLE, Sept. 18, 2020 /PRNewswire/ -- Pressure from
this summer's housing inventory shortage caused U.S. home values to
rise sharply in August. They are up 0.7% from July to $256,663, the biggest month-over-month increase
in nearly seven years, according to the August Zillow® Real Estate
Market Report1. Home value growth accelerated last month
in 48 of the 50 largest markets and was relatively constant in the
other two: Birmingham, Ala. and
Richmond, Va.
Year over year, home values are up 5.1% in August, the largest
annual rise since March 2019. Markets
with the highest year-over-year increases in home values were
Phoenix (10.5%), San Jose (10.3%) and Seattle (9.2%). The smallest year-over-year
gains in home values among major metros were seen in Chicago (1.9%), New
York (2.3%) and San
Francisco (2.7%).
"American home shoppers faced an historic shortage of listings
to choose from this summer, and that scarcity is now reflected in
rapidly appreciating home values after a sluggish start to the home
shopping season this spring," said Zillow economist Jeff Tucker. "Builders are racing to catch up
with demand, and rising prices should encourage more potential
sellers to come off the sidelines and list. Still, the shortage of
inventory should keep housing markets unusually tilted in sellers'
favor this autumn."
Nationwide, demand continues to outpace supply. Homes continue
to fly off the market at a record pace and inventory is
contracting, according to the most recent Zillow weekly housing
market data. Listings' typical time on the market was 14 days, as
of the week ending Sept. 12. That's
14 days faster than the year before.
Looking forward, upward price pressure seems likely to continue
at least through the fall, thanks to the large inventory deficit.
Purchase demand is holding steady at high levels, reflected in
strong pending sales data, perhaps due to delayed purchases from
earlier this spring and summer. Given that the housing market
typically begins to cool off by late August, this stable volume of
sales looks even more impressive: pending sales were up a whopping
23.3% year over year in the week ending September 12.
The Fed expects to keep interest rates near zero through at
least 2023, and allow periods of higher inflation, in an effort to
revive the economy. This news reinforces the Federal Reserve's
commitment to keeping credit flowing using a broad policy toolkit
that included purchases of mortgage-backed securities this year. In
that context there is little reason to expect mortgage rates to
rise significantly any time soon, which should help keep buyers
active.
While the for-sale market has strengthened since April, the
rental market has softened. The U.S. has seen yearly rent price
appreciation decline every month since the pandemic began, dropping
from 3.8% year-over-year rent growth in February to just 0.7% in
August. The typical U.S. rent was $1,771 in August, down 0.3% from July, which is
the largest monthly decrease seen since September
2017.
"Rents softened further this August, especially in New York and the San
Francisco Bay Area," Tucker said. "Rental demand has been
battered by still-elevated unemployment as well as some renters
opting out of expensive markets with their ability to work remotely
during the pandemic. The rental market may also be feeling an early
gust of demographic headwinds, as the bumper crop of Millennials in
their early 30s begin making the leap to homeownership."
Compared to last year, typical rent is down 4.6% in New York, 4% in San
Francisco and 3.8% in San
Jose. In Boston, the fifth
most expensive metro within the top 50, rents are down 2.8% since
last year. Typical rents in Washington,
D.C., Chicago, Austin, Houston, and Denver also declined since last year. The
softening is especially pronounced in areas where higher shares of
college students typically live.
Meanwhile, rents in Midwestern and Sun Belt cities are making
headlong strides upwards. Memphis
leads the way with 8.3% rent appreciation since last year, and has
seen monthly increases throughout the pandemic. Phoenix rents bounced back with 1.1%
month-over-month growth in August after posting negative figures in
April and May.
Mortgage rates listed by third-party lenders on Zillow started
the month at 3.1% and rose to twin peaks of 3.17% on Aug. 12 and Aug.
28. High volatility in mid-August led to a minimum of 2.97%
on Aug. 13. August closed with rates
at 3.12%. Zillow's real-time mortgage rates are based on thousands
of custom mortgage quotes submitted daily to anonymous borrowers on
the Zillow Group Mortgages site by third-party lenders and reflect
recent changes in the market2.
Metropolitan
Area*
|
Zillow Home Value
Index (ZHVI), August 2020
|
ZHVI - YoY Change,
August 2020
|
Total Inventory -
YoY Change, Week Ending Sept. 12
|
Zillow Observed
Rent Index (ZORI), August 2020
|
ZORI - YoY Change,
August 2020
|
United
States
|
$256,663
|
5.1%
|
-29.4%
|
$1,771
|
0.7%
|
New York/Newark,
NY/NJ
|
$493,579
|
2.3%
|
-13.4%
|
$2,716
|
-4.6%
|
Los Angeles,
CA
|
$706,714
|
5.9%
|
-23.8%
|
$2,627
|
0.0%
|
Chicago,
IL
|
$246,357
|
1.9%
|
-26.9%
|
$1,791
|
-1.0%
|
Dallas-Fort Worth,
TX
|
$261,739
|
4.1%
|
-29.0%
|
$1,620
|
1.1%
|
Philadelphia,
PA
|
$262,437
|
5.1%
|
-37.8%
|
$1,620
|
1.3%
|
Houston,
TX
|
$222,936
|
3.1%
|
-25.8%
|
$1,537
|
-0.6%
|
Washington,
DC
|
$452,030
|
5.1%
|
-33.1%
|
$2,161
|
-1.2%
|
Miami-Fort
Lauderdale, FL
|
$310,471
|
4.1%
|
-9.6%
|
$1,947
|
1.2%
|
Atlanta,
GA
|
$251,454
|
5.7%
|
-25.3%
|
$1,609
|
3.3%
|
Boston, MA
|
$514,321
|
4.9%
|
-24.2%
|
$2,490
|
-2.8%
|
San Francisco,
CA
|
$1,127,066
|
2.7%
|
1.5%
|
$3,167
|
-4.0%
|
Detroit,
MI
|
$188,420
|
4.3%
|
-36.4%
|
$1,316
|
2.5%
|
Riverside,
CA
|
$400,664
|
5.7%
|
-46.7%
|
$2,097
|
5.5%
|
Phoenix,
AZ
|
$312,317
|
10.5%
|
-21.8%
|
$1,521
|
5.7%
|
Seattle,
WA
|
$559,226
|
9.2%
|
-26.7%
|
$2,000
|
0.4%
|
Minneapolis-St. Paul,
MN
|
$305,202
|
5.4%
|
-25.6%
|
$1,602
|
1.5%
|
San Diego,
CA
|
$643,903
|
5.9%
|
-36.7%
|
$2,422
|
1.8%
|
St. Louis,
MO
|
$187,795
|
5.0%
|
-31.5%
|
$1,155
|
2.7%
|
Tampa, FL
|
$242,924
|
7.2%
|
-31.9%
|
$1,580
|
4.1%
|
Baltimore,
MD
|
$302,464
|
2.9%
|
-44.4%
|
$1,732
|
0.3%
|
Denver, CO
|
$458,600
|
4.5%
|
-31.1%
|
$1,821
|
-0.1%
|
Pittsburgh,
PA
|
$167,172
|
5.2%
|
-24.5%
|
$1,148
|
1.1%
|
Portland,
OR
|
$429,608
|
5.3%
|
-31.0%
|
$1,688
|
1.3%
|
Charlotte,
NC
|
$249,960
|
8.0%
|
-39.7%
|
$1,520
|
1.9%
|
Sacramento,
CA
|
$444,733
|
5.7%
|
-41.1%
|
$1,908
|
4.3%
|
San Antonio,
TX
|
$211,964
|
3.2%
|
-23.4%
|
$1,395
|
1.5%
|
Orlando,
FL
|
$266,005
|
5.4%
|
-13.7%
|
$1,619
|
1.1%
|
Cincinnati,
OH
|
$197,135
|
7.2%
|
-37.4%
|
$1,293
|
2.9%
|
Cleveland,
OH
|
$168,298
|
6.7%
|
-38.3%
|
$1,166
|
2.8%
|
Kansas City,
MO
|
$214,639
|
6.3%
|
-42.4%
|
$1,251
|
4.3%
|
Las Vegas,
NV
|
$302,071
|
4.0%
|
-22.5%
|
$1,478
|
3.0%
|
Columbus,
OH
|
$222,467
|
7.1%
|
-37.8%
|
$1,356
|
4.6%
|
Indianapolis,
IN
|
$192,677
|
7.9%
|
-40.2%
|
$1,340
|
4.8%
|
San Jose,
CA
|
$1,224,366
|
10.3%
|
-19.0%
|
$3,129
|
-3.8%
|
Austin, TX
|
$357,346
|
6.1%
|
-32.2%
|
$1,598
|
-0.8%
|
Virginia Beach,
VA
|
$252,041
|
4.8%
|
-36.3%
|
$1,413
|
3.8%
|
Nashville,
TN
|
$289,792
|
5.9%
|
-17.2%
|
$1,620
|
2.4%
|
Providence,
RI
|
$333,191
|
5.7%
|
-36.5%
|
$1,635
|
4.4%
|
Milwaukee,
WI
|
$212,166
|
7.5%
|
-8.2%
|
$1,147
|
2.6%
|
Jacksonville,
FL
|
$240,785
|
4.8%
|
-33.1%
|
$1,419
|
3.2%
|
Memphis,
TN
|
$164,254
|
8.5%
|
-40.6%
|
$1,396
|
8.3%
|
Oklahoma City,
OK
|
$165,014
|
6.0%
|
-33.9%
|
$1,096
|
2.0%
|
Louisville,
KY
|
$189,706
|
6.8%
|
-41.8%
|
$1,098
|
4.4%
|
Hartford,
CT
|
$246,821
|
4.0%
|
-40.4%
|
$1,428
|
3.9%
|
Richmond,
VA
|
$256,417
|
4.6%
|
-35.1%
|
$1,355
|
3.0%
|
New Orleans,
LA
|
$215,218
|
5.7%
|
-42.3%
|
$1,470
|
0.5%
|
Buffalo,
NY
|
$183,071
|
5.2%
|
-32.4%
|
$1,116
|
4.5%
|
Raleigh,
NC
|
$292,160
|
4.5%
|
-37.7%
|
$1,546
|
1.8%
|
Birmingham,
AL
|
$174,875
|
7.0%
|
-33.7%
|
$1,152
|
4.0%
|
Salt Lake City,
UT
|
$405,189
|
7.9%
|
-41.4%
|
$1,461
|
1.3%
|
|
|
*
|
Table ordered by
market size
|
1 The Zillow Real Estate Market Reports are a
monthly overview of the national and local real estate markets. The
reports are compiled by Zillow Real Estate Research. For more
information, visit www.zillow.com/research/. The data in Zillow's
Real Estate Market Reports are aggregated from public sources by a
number of data providers for 928 metropolitan and micropolitan
areas dating back to 1996. Mortgage and home loan data are
typically recorded in each county and publicly available through a
county recorder's office. Methodologies and all current monthly
data at the national, state, metro, city, ZIP code and neighborhood
level can be accessed at www.zillow.com/research/data.
2 Zillow Group Marketplace, Inc. is a licensed
mortgage broker, NMLS #1303160.
About Zillow
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website in the U.S., is building an on-demand real estate
experience. Whether selling, buying, renting or financing,
customers can turn to Zillow's businesses to find and get into
their next home with speed, certainty and ease.
In addition to for-sale and rental listings, Zillow Offers buys
and sells homes directly in dozens of markets across the country,
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our affiliate lender, provides our customers with an easy option to
get pre-approved and secure financing for their next home
purchase.
Millions of people visit Zillow Group sites every month to start
their home search, and now they can rely on Zillow to help them
finish it — with the same confidence, ease and empowerment they've
come to expect from real estate's most trusted brand.
Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and
ZG).
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SOURCE Zillow