Buyers outnumbering sellers spurs impressive
price growth, even amid muted sales
- Monthly home value growth of 1.4% is the highest since
June 2022.
- Buyers are motivated despite few options and rising mortgage
rates — sales rose nearly 10% from April to May.
- Inventory reached a record low for May as high mortgage rates
deter sellers.
SEATTLE, June 12,
2023 /PRNewswire/ -- Competition among buyers over
few available houses has made this home shopping season unusually
hot, according to the latest market report1 from
Zillow®. Meanwhile, high mortgage rates are continuing to deter
homeowners from listing, pushing inventory to record
lows.
"Many homeowners are still opting not to sell and give up
historically low mortgage rates. But those who do have been
rewarded with bidding wars as buyers compete for limited options,"
said Zillow senior economist Jeff
Tucker. "Spring is traditionally the hottest time of year in
the housing market, and 2023 has been no exception. Time will tell
if seasonal price slowdowns arrive on time this year, later in
summer."
Typical U.S. home values grew by 1.4% from April to May, the
strongest monthly appreciation since last June. That's a few
degrees cooler than the previous two springs, but hotter than in
2018 or 2019. The typical home value is $346,856 — up 0.9% over last May and up 3.4% from
a recent low in January.
A new loan on a home priced at the typical value in the U.S.
would feature monthly mortgage payments just shy of $1,800. That monthly payment is 22% higher than
last year, double that of May 2019,
and the second highest on record after October 2022.
Regional appreciation trends
Affordability is still
the key driver of demand, and that's reflected in the markets that
are appreciating fastest. The largest monthly home value gains are
in the Midwest — home to six of the seven metros with the biggest
gains in May. Columbus, Ohio, led
the way (2.2% monthly gain), followed closely by Cincinnati, Detroit, Richmond and Milwaukee.
Price growth also sprang back
in West Coast tech hubs after prices fell significantly there late
in 2022. Home values rose faster than the national average for the
second straight month in San Jose
(1.9%), Seattle (1.7%) and
San Francisco (1.4%).
Inventory shortage drags on, driven by high rates
A
shortage of new listings has dogged the housing market for almost a
year. The flow of new listings was down 23% year over year in May —
a milder drop than in April, but nearly equal to that of
March.
The chief driver is still higher mortgage rates, which make a
new loan unattractive when the majority of mortgaged homes are
financed for less than 4%. Even without intentions to buy again,
anyone with a mortgage at a rate under 4% might be loath to sell
when there's a possibility to rent out the home for more than their
carrying costs.
The lack of new listings, paired with resolute demand from
buyers, has driven prices up and total inventory down to record
lows for this time of year. The number of homes for sale on Zillow
in May was 3.1% lower than last year — the former low-water mark —
and a massive 46% below that of May 2019.
Buyers still motivated, despite challenging
conditions
Sales measured by newly pending listings climbed
9.5% from April, shrinking the year-over-year decline to 18% in May
and marking steady improvement since March. While this looks low in
comparison to the hot pandemic era, sales figures are close to
pre-pandemic standards.
Pending sales peaked in May in 2018, 2019 and 2022; the weeks
ahead will reveal if that seasonal pattern repeats itself, or if
the buying season stretches into summer, as it did in 2020 and
2021.
Metropolitan
Area*
|
May Zillow
Home Value
Index (ZHVI)
(Raw)
|
ZHVI Change,
Month over
Month (MoM)
|
Monthly Mortgage
Payment (20% Down)
|
Monthly Mortgage
Payment Change
Since 2019
|
Newly Pending
Sales Change,
YoY
|
New Inventory
Change,
YoY
|
Total Inventory
Change,
YoY
|
United
States
|
$346,856
|
1.4 %
|
$1,798
|
$901
|
-18.0 %
|
-22.8 %
|
-3.1 %
|
New York, NY
|
$601,507
|
1.5 %
|
$3,105
|
$1,346
|
-2.6 %
|
-30.5 %
|
-20.5 %
|
Los Angeles,
CA
|
$890,238
|
1.6 %
|
$4,598
|
$2,098
|
-23.3 %
|
-30.9 %
|
-19.8 %
|
Chicago, IL
|
$302,085
|
1.9 %
|
$1,565
|
$677
|
-20.6 %
|
-25.3 %
|
-21.2 %
|
Dallas, TX
|
$376,445
|
1.1 %
|
$1,956
|
$954
|
-13.5 %
|
-12.4 %
|
26.7 %
|
Houston, TX
|
$306,984
|
0.8 %
|
$1,596
|
$760
|
-19.4 %
|
-17.7 %
|
12.1 %
|
Washington,
DC
|
$547,358
|
1.4 %
|
$2,830
|
$1,204
|
-27.3 %
|
-32.4 %
|
-28.4 %
|
Philadelphia,
PA
|
$342,564
|
1.8 %
|
$1,769
|
$848
|
-23.1 %
|
-26.8 %
|
-18.5 %
|
Miami, FL
|
$458,284
|
1.2 %
|
$2,366
|
$1,274
|
-10.9 %
|
-20.8 %
|
21.7 %
|
Atlanta, GA
|
$373,640
|
1.3 %
|
$1,938
|
$1,030
|
-29.3 %
|
-28.0 %
|
-7.0 %
|
Boston, MA
|
$646,902
|
1.9 %
|
$3,347
|
$1,477
|
-23.9 %
|
-20.4 %
|
-18.9 %
|
Phoenix, AZ
|
$438,628
|
0.6 %
|
$2,279
|
$1,179
|
-27.0 %
|
-44.6 %
|
-6.5 %
|
San Francisco,
CA
|
$1,128,962
|
1.4 %
|
$5,848
|
$2,404
|
-9.3 %
|
-31.4 %
|
-22.6 %
|
Riverside,
CA
|
$552,267
|
0.9 %
|
$2,865
|
$1,401
|
-24.0 %
|
-35.1 %
|
-15.3 %
|
Detroit, MI
|
$244,000
|
2.1 %
|
$1,263
|
$585
|
-17.1 %
|
-22.0 %
|
-13.4 %
|
Seattle, WA
|
$705,103
|
1.7 %
|
$3,653
|
$1,690
|
-34.1 %
|
-39.4 %
|
-28.9 %
|
Minneapolis,
MN
|
$371,419
|
1.6 %
|
$1,932
|
$826
|
-23.9 %
|
-22.8 %
|
-17.9 %
|
San Diego,
CA
|
$864,912
|
1.5 %
|
$4,462
|
$2,165
|
-29.9 %
|
-34.3 %
|
-29.4 %
|
Tampa, FL
|
$370,792
|
0.9 %
|
$1,923
|
$1,064
|
-16.8 %
|
-26.9 %
|
11.9 %
|
Denver, CO
|
$592,325
|
1.3 %
|
$3,070
|
$1,344
|
-26.6 %
|
-17.3 %
|
-0.3 %
|
Baltimore,
MD
|
$368,622
|
1.6 %
|
$1,905
|
$828
|
-23.2 %
|
-27.4 %
|
-22.0 %
|
St. Louis,
MO
|
$240,837
|
1.8 %
|
$1,246
|
$589
|
-13.7 %
|
-15.0 %
|
-6.6 %
|
Orlando, FL
|
$386,090
|
1.0 %
|
$2,002
|
$1,039
|
-22.3 %
|
-28.3 %
|
5.5 %
|
Charlotte,
NC
|
$373,876
|
1.4 %
|
$1,937
|
$1,050
|
-60.5 %
|
-31.0 %
|
10.4 %
|
San Antonio,
TX
|
$296,036
|
0.7 %
|
$1,541
|
$762
|
-21.0 %
|
-15.8 %
|
34.5 %
|
Portland, OR
|
$552,191
|
1.5 %
|
$2,860
|
$1,263
|
-30.5 %
|
-24.4 %
|
-10.5 %
|
Sacramento,
CA
|
$565,368
|
1.2 %
|
$2,932
|
$1,288
|
-21.3 %
|
-32.5 %
|
-26.7 %
|
Pittsburgh,
PA
|
$201,980
|
1.6 %
|
$1,049
|
$470
|
-17.3 %
|
-21.7 %
|
-8.3 %
|
Cincinnati,
OH
|
$272,945
|
2.2 %
|
$1,408
|
$697
|
-21.4 %
|
-23.4 %
|
-18.0 %
|
Austin, TX
|
$483,166
|
0.6 %
|
$2,523
|
$1,295
|
-20.7 %
|
-22.8 %
|
28.7 %
|
Las Vegas,
NV
|
$400,274
|
0.5 %
|
$2,081
|
$920
|
-20.3 %
|
-44.0 %
|
-9.1 %
|
Kansas City,
MO
|
$298,596
|
1.9 %
|
$1,543
|
$762
|
-18.6 %
|
-17.5 %
|
-9.8 %
|
Columbus, OH
|
$306,980
|
2.2 %
|
$1,583
|
$793
|
-24.1 %
|
-23.3 %
|
-14.8 %
|
Indianapolis,
IN
|
$276,179
|
1.8 %
|
$1,429
|
$749
|
-24.3 %
|
-22.6 %
|
-8.3 %
|
Cleveland,
OH
|
$216,276
|
1.9 %
|
$1,120
|
$528
|
-20.0 %
|
-19.7 %
|
-12.8 %
|
San Jose, CA
|
$1,457,497
|
1.9 %
|
$7,538
|
$3,156
|
-18.1 %
|
-29.2 %
|
-25.1 %
|
Nashville,
TN
|
$437,507
|
1.2 %
|
$2,269
|
$1,198
|
-15.7 %
|
-16.2 %
|
22.7 %
|
Virginia Beach,
VA
|
$333,914
|
1.3 %
|
$1,728
|
$794
|
-20.0 %
|
-23.2 %
|
-19.3 %
|
Providence,
RI
|
$445,895
|
1.6 %
|
$2,309
|
$1,115
|
-20.1 %
|
-25.2 %
|
-20.9 %
|
Jacksonville,
FL
|
$360,695
|
0.7 %
|
$1,878
|
$1,011
|
-17.9 %
|
-25.2 %
|
22.7 %
|
Milwaukee,
WI
|
$319,686
|
2.0 %
|
$1,656
|
$732
|
-16.9 %
|
-23.9 %
|
-28.2 %
|
Oklahoma City,
OK
|
$230,429
|
1.4 %
|
$1,191
|
$595
|
-20.8 %
|
-15.7 %
|
17.6 %
|
Raleigh, NC
|
$434,117
|
1.2 %
|
$2,252
|
$1,154
|
-11.4 %
|
-26.8 %
|
-8.3 %
|
Memphis, TN
|
$234,690
|
0.9 %
|
$1,221
|
$642
|
-25.6 %
|
-9.1 %
|
13.9 %
|
Richmond, VA
|
$358,287
|
2.1 %
|
$1,848
|
$913
|
-8.1 %
|
-25.0 %
|
-21.2 %
|
Louisville,
KY
|
$251,318
|
1.5 %
|
$1,301
|
$601
|
-24.7 %
|
-24.6 %
|
-15.7 %
|
New Orleans,
LA
|
$239,559
|
0.6 %
|
$1,252
|
$513
|
-26.6 %
|
-17.6 %
|
30.6 %
|
Salt Lake City,
UT
|
$542,307
|
1.0 %
|
$2,814
|
$1,418
|
-28.1 %
|
-26.4 %
|
-7.7 %
|
Hartford, CT
|
$331,583
|
1.8 %
|
$1,719
|
$776
|
-8.1 %
|
-27.3 %
|
-30.8 %
|
Buffalo, NY
|
$247,526
|
1.9 %
|
$1,279
|
$609
|
-25.3 %
|
-12.6 %
|
-9.8 %
|
Birmingham,
AL
|
$246,363
|
1.0 %
|
$1,278
|
$644
|
|
-21.7 %
|
1.2 %
|
*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.
About Zillow Group
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want by connecting them with digital solutions, great partners, and
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Zillow affiliate.
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