Relatively high rates are keeping new listings
low, frustrating willing buyers
- New listings are at a record low for February, contributing to
an incredibly low supply.
- Sales activity lost momentum in February as rates
rose.
- U.S. home values stabilized after a six-month decline.
- Well-priced homes are moving. At 17 days, the median time to
pending is faster than before the pandemic.
SEATTLE, March 21,
2023 /PRNewswire/ -- Mortgage rates — both their high
levels and their wild swings — are making life difficult for both
buyers and sellers, according to Zillow's® latest market
report1. Relatively high rates have brought new listings
down to record lows, leaving buyers with limited options. Any dips
in mortgage rates are stimulating demand and stiffening
competition, but they have been short-lived.
"We know there are a lot of motivated buyers looking for homes.
When we see mortgage rates fall, sales pick up," said Skylar Olsen, Zillow chief economist. "But
buyers are disappointed in their options. Homeowners aren't giving
up their current house and low monthly payments to join a tight,
expensive market. Meanwhile, volatility in the economy makes
planning extremely difficult."
The flow of new listings in February is at a record low for this
time of year, nearly a third lower than before the pandemic and 22%
lower than last year. Mortgage rates are likely driving the decline
— those who bought or refinanced in 2020 or 2021, when rates were
well below 3.5%, are unwilling to trade in their current mortgage
for a new one with double the interest, Olsen said. The largest
annual declines in new listings are in West Coast markets:
San Jose (-47%), Portland (-46%), Seattle (-45%) and Sacramento (-44%).
The trickle of new listings is contributing to extremely low
levels of total inventory, now 17% higher than what was the
absolute bottom in February 2022, but
still about 43% below pre-pandemic norms. Instead of inventory
growing through the first two months of the year, like it did in
2018 and 2019, the number of choices shrank.
"This market is not as frenzied as it was during the last two
years, but home buyers might start to feel some déjà vu at the
dearth of options," said Jeff
Tucker, Zillow senior economist. "Home sellers seem to be
sitting out the early spring selling season in surprising
numbers."
Mortgage rates have been incredibly volatile over the past six
months, and buyers are responding to the chance to lock in a
cheaper monthly payment when the opportunity arises. Sales activity
is picking up, just not accelerating like it usually does at this
time of year. After being reinvigorated by lower rates in late
January, sales slowed over the course of February as rates hiked
back up. All in all, February saw 19% fewer newly pending sales
than last year and 5% fewer sales than the most recent pre-pandemic
reading in 2020.
Ultralow inventory means that when attractive, well-priced
houses do come on the market, they are readily finding buyers.
Homes that went under contract in February did so after a median
span of 17 days. That's more time than in 2022 and 2021, when time
on market was seven and nine days, respectively, but significantly
less than before the pandemic.
Home values flatlined from January to February, leaving the
typical home value at $328,604, or 4%
below the peak value set in July
2022, according to the Zillow Home Value Index. Home values
are 4.4% higher than one year earlier — a rapidly decelerating pace
of annual growth, down from the nearly record-high 18.8%
year-over-year growth measured last April. The overall lack of
inventory, along with the resurgence of buyers when costs fall,
should prevent significant price declines.
Rates are likely to remain volatile through the spring selling
season. Working with a mortgage professional early in the process
can help buyers demystify what's affordable, prepare their credit
and get pre-approved to strengthen their offer.
Metropolitan
Area*
|
February Zillow Home
Value Index (ZHVI) (Raw)
|
ZHVI Change, Year
over Year (YoY)
|
Monthly Mortgage
Cost (at 20% Down)
|
Monthly Mortgage
Cost Change, YoY
|
Total Inventory
Change Since February 2020
|
New Inventory Change
Since February 2020
|
Median Days on
Market
|
United
States
|
$328,604
|
4.4 %
|
$1,675
|
46.3 %
|
-38.1 %
|
-31.4 %
|
17
|
New York, NY
|
$564,512
|
3.5 %
|
$2,865
|
42.8 %
|
-43.9 %
|
-45.7 %
|
33
|
Los Angeles,
CA
|
$847,694
|
-2.4 %
|
$4,407
|
38.4 %
|
-31.4 %
|
-41.0 %
|
19
|
Chicago, IL
|
$282,657
|
2.5 %
|
$1,433
|
42.0 %
|
-49.4 %
|
-43.7 %
|
12
|
Dallas, TX
|
$362,237
|
1.6 %
|
$1,859
|
44.6 %
|
-44.0 %
|
-41.7 %
|
17
|
Houston, TX
|
$296,706
|
3.3 %
|
$1,519
|
45.7 %
|
-30.2 %
|
-30.7 %
|
25
|
Washington,
DC
|
$523,130
|
0.4 %
|
$2,673
|
39.8 %
|
-39.3 %
|
-40.3 %
|
7
|
Miami, FL
|
$446,337
|
10.5 %
|
$2,276
|
55.5 %
|
-38.8 %
|
-24.3 %
|
30
|
Philadelphia,
PA
|
$321,429
|
5.7 %
|
$1,633
|
46.9 %
|
-39.7 %
|
-33.4 %
|
10
|
Atlanta, GA
|
$356,353
|
3.6 %
|
$1,825
|
46.6 %
|
-36.1 %
|
-33.3 %
|
20
|
Phoenix, AZ
|
$428,063
|
-1.9 %
|
$2,202
|
38.3 %
|
-2.5 %
|
-26.8 %
|
38
|
Boston, MA
|
$608,548
|
1.5 %
|
$3,109
|
42.3 %
|
-39.7 %
|
-39.6 %
|
9
|
San Francisco,
CA
|
$1,079,746
|
-7.7 %
|
$5,556
|
31.0 %
|
-15.1 %
|
-36.9 %
|
14
|
Riverside,
CA
|
$537,289
|
0.2 %
|
$2,772
|
41.8 %
|
-32.7 %
|
-38.5 %
|
27
|
Detroit, MI
|
$226,017
|
3.9 %
|
$1,146
|
44.5 %
|
-35.6 %
|
-32.6 %
|
15
|
Seattle, WA
|
$683,838
|
-3.9 %
|
$3,513
|
36.8 %
|
-16.3 %
|
-38.0 %
|
9
|
Minneapolis,
MN
|
$349,932
|
0.3 %
|
$1,787
|
39.6 %
|
-46.7 %
|
-46.7 %
|
19
|
San Diego,
CA
|
$828,029
|
-1.7 %
|
$4,250
|
39.7 %
|
-43.5 %
|
-43.2 %
|
12
|
Tampa, FL
|
$357,951
|
5.2 %
|
$1,831
|
49.5 %
|
-21.7 %
|
-24.3 %
|
21
|
Denver, CO
|
$568,870
|
-2.4 %
|
$2,921
|
37.4 %
|
-20.5 %
|
-26.1 %
|
9
|
St. Louis,
MO
|
$224,179
|
4.9 %
|
$1,139
|
46.2 %
|
-51.1 %
|
-30.0 %
|
6
|
Baltimore,
MD
|
$348,165
|
3.7 %
|
$1,763
|
42.5 %
|
-49.0 %
|
-38.3 %
|
8
|
Charlotte,
NC
|
$353,739
|
4.0 %
|
$1,811
|
47.0 %
|
-2.5 %
|
-28.6 %
|
19
|
Orlando, FL
|
$376,324
|
5.8 %
|
$1,928
|
49.9 %
|
-23.0 %
|
-27.2 %
|
20
|
San Antonio,
TX
|
$286,504
|
3.5 %
|
$1,464
|
45.3 %
|
-16.2 %
|
-18.8 %
|
28
|
Portland, OR
|
$524,621
|
-1.9 %
|
$2,691
|
37.4 %
|
-26.5 %
|
-38.5 %
|
12
|
Sacramento,
CA
|
$544,971
|
-4.5 %
|
$2,803
|
34.4 %
|
-31.8 %
|
-45.3 %
|
17
|
Las Vegas,
NV
|
$393,156
|
-2.1 %
|
$2,028
|
38.9 %
|
-13.7 %
|
-38.9 %
|
43
|
Pittsburgh,
PA
|
$189,207
|
1.3 %
|
$964
|
41.9 %
|
-36.7 %
|
-24.9 %
|
11
|
Austin, TX
|
$475,191
|
-4.3 %
|
$2,451
|
37.2 %
|
25.8 %
|
-20.1 %
|
60
|
Cincinnati,
OH
|
$253,512
|
4.8 %
|
$1,288
|
45.9 %
|
-38.5 %
|
-25.5 %
|
5
|
Kansas City,
MO
|
$276,419
|
5.8 %
|
$1,404
|
47.2 %
|
-49.0 %
|
-38.5 %
|
5
|
Columbus, OH
|
$285,430
|
5.6 %
|
$1,454
|
48.4 %
|
-36.0 %
|
-28.6 %
|
5
|
Indianapolis,
IN
|
$260,160
|
3.5 %
|
$1,325
|
45.4 %
|
-27.9 %
|
-20.6 %
|
10
|
Cleveland,
OH
|
$201,852
|
6.2 %
|
$1,026
|
47.9 %
|
-47.7 %
|
-24.2 %
|
9
|
San Jose, CA
|
$1,381,757
|
-6.1 %
|
$7,225
|
35.6 %
|
-25.8 %
|
-39.0 %
|
17
|
Nashville,
TN
|
$415,828
|
3.3 %
|
$2,128
|
46.7 %
|
-22.2 %
|
-21.9 %
|
21
|
Virginia Beach,
VA
|
$314,340
|
4.3 %
|
$1,602
|
44.4 %
|
-49.8 %
|
-31.3 %
|
21
|
Providence,
RI
|
$419,810
|
4.7 %
|
$2,139
|
46.9 %
|
-60.1 %
|
-40.0 %
|
10
|
Jacksonville,
FL
|
$348,466
|
6.1 %
|
$1,785
|
51.3 %
|
-16.9 %
|
-24.7 %
|
37
|
Milwaukee,
WI
|
$287,671
|
5.6 %
|
$1,457
|
45.4 %
|
-42.5 %
|
-29.3 %
|
20
|
Oklahoma City,
OK
|
$217,846
|
6.9 %
|
$1,112
|
49.6 %
|
-24.5 %
|
-16.7 %
|
11
|
Raleigh, NC
|
$415,939
|
2.4 %
|
$2,129
|
45.2 %
|
-30.2 %
|
-33.8 %
|
13
|
Memphis, TN
|
$223,942
|
5.3 %
|
$1,142
|
48.0 %
|
-16.8 %
|
-18.7 %
|
24
|
Richmond, VA
|
$335,501
|
7.4 %
|
$1,706
|
49.5 %
|
-51.2 %
|
-36.9 %
|
6
|
New Orleans,
LA
|
$230,141
|
-0.2 %
|
$1,166
|
36.7 %
|
32.4 %
|
21.7 %
|
29
|
Louisville,
KY
|
$237,002
|
4.1 %
|
$1,207
|
44.5 %
|
-37.1 %
|
-20.4 %
|
7
|
Salt Lake City,
UT
|
$519,638
|
-2.0 %
|
$2,657
|
37.5 %
|
-4.5 %
|
-30.2 %
|
20
|
Hartford, CT
|
$309,095
|
6.9 %
|
$1,571
|
49.3 %
|
-68.1 %
|
-41.9 %
|
6
|
Buffalo, NY
|
$230,715
|
4.1 %
|
$1,176
|
46.1 %
|
-42.3 %
|
-21.5 %
|
11
|
Birmingham,
AL
|
$232,880
|
5.7 %
|
$1,184
|
47.5 %
|
-24.8 %
|
-22.1 %
|
12
|
*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.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z) (NASDAQ: 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.
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#10287 (www.nmlsconsumeraccess.org).
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SOURCE Zillow