Z Zillow Group Inc

Record price growth, new in-demand features and a rise in virtual home touring mark the past five years in the housing market

• U.S. home values are up 45% since the start of the pandemic five years ago. Home values and rents shot up most significantly in Miami.
• There are nearly a million more $1 million homes nationwide than there were five years ago.
• Demand for outdoor home features has stuck, while the "cloffice" proved to be a fad.

SEATTLE, Feb. 27, 2025 /PRNewswire/ -- The housing market of today looks remarkably different from the market five years ago, just before the COVID-19 outbreak was declared a global pandemic in March 2020. Since then, home values and rents have surged to record highs, the number of $1 million homes has more than doubled, and both what buyers want in a home and how they shop for one have changed, perhaps permanently.

"A perfect cocktail of lower mortgage rates, higher savings and a growing desire for space drove housing demand to new heights during the pandemic. Just about every major market experienced price growth far above what they'd become accustomed to, resetting the financial bar for homeownership," said Orphe Divounguy, senior economist at Zillow®. "While the financial hurdle is higher, the home-shopping process has improved. Virtual tools are helping buyers make more informed decisions and reducing the time they spend on in-person tours."

Home values and rent prices
Nationally, home values have grown 45.3% since February 2020, just before the pandemic. That's more than a decade's worth of typical growth packed into just five years.

The hottest market over that period is Miami, where home values and rents have grown more than any other major metro area. Tampa and Hartford are also among the top five for growth in both home values and rents since the pandemic started.

Home values in Austin took the wildest ride during the pandemic. Austin easily eclipsed any other market in terms of the highest year-over-year growth reached, with home values growing 40.3% during the early pandemic frenzy in the year ending August 2021. However, Austin also experienced the biggest year-over-year decline as rising mortgage rates chilled buyer demand and new construction helped ease competition, with home values falling 14% in the year ending July 2023. Overall, Austin home values are 37.8% higher than they were in February 2020.

In New York City, median asking rents have increased 24.1% since the start of the pandemic to $3,600, according to Zillow's New York City brand, StreetEasy. The Bronx saw the sharpest rise in rents of any borough (42.3%), while Queens rents began rising quickly in 2022 as growing affordability challenges in Brooklyn and Manhattan pushed more renters to consider other areas.

What $1 million can buy
Skyrocketing prices over the past five years sent the value of nearly a million more homes above the $1 million threshold. There are now just under 1,650,000 homes worth at least $1 million nationwide, about 989,000 more than when the pandemic started.

Nationally, the typical $1 million home is about 70 square feet smaller than when the pandemic began, at 2,388 square feet, and it still includes four bedrooms and three bathrooms. In three major metro areas — Indianapolis, Hartford and Nashville — the typical $1 million home lost more than 1,000 square feet, with Buffalo (-999 square feet) and Raleigh (-996 square feet) just missing that bar. 

Construction boom putting a ceiling on price growth
Builders reacted in a big way to the surge in housing demand, with more than 1 million single-family home starts in 2021, reaching that milestone for the first time since 2007. 

The metro areas with the most single-family permits since 2020 are Houston, Dallas, Phoenix, Atlanta and Austin. In each of these markets, the new homes hitting the market have helped to ease what was red-hot price growth and to improve affordability.

With rising mortgage rates squeezing buyers' budgets, builders have pivoted to build more higher-density homes, such as townhomes and condos, in recent years, allowing them to keep prices within reach while mitigating rising land and material costs.

Some in-demand features stuck — and some did not (sorry, 'cloffices')
While stuck at home during the pandemic, functional home features often outweighed style — buyers prioritized backyards over barn doors. Five years later, outdoor features remain highly sought after, with buyers willing to pay at least 2% more for homes with outdoor kitchens, pizza ovens and bluestone patios. Even amid the skyscrapers of New York City, searches for rentals with outdoor space jumped 128% last year, according to data from StreetEasy.

A few pandemic-era must-haves proved to be short-lived fads. "Cloffices" — micro home offices carved out of closets — are one such example, showing up in half as many for-sale listings on Zillow by the end of 2023. A similar fate befell "Zoom rooms," office sheds and a spot for an exercise bike.

The pandemic supercharged virtual home shopping
Buyers are spending less time touring homes in person than they did before the pandemic, likely in part because they are better able to understand floor plans with improved digital tools. The share of for-sale listings on Zillow with a Zillow 3D Home tour has more than quadrupled since December 2022, the earliest data available.

That evolution may progress more rapidly in the coming years with innovations like Zillow Showcase, which features AI-powered listings with immersive media to give richer insights into a home's layout and features. Zillow Showcase listings drive more views, saves and shares compared to similar nearby non-Showcase listings on Zillow.

The demand for these types of online tools is growing. Seven out of 10 buyers say 3D tours help them get a better feel for the space than static photos (up from 52% in 2019), and 62% say they wish more listings had 3D tours (up from 46% in 2019).

A smaller share of buyers now say they wasted time during their home search by viewing properties they would have skipped if they better understood the floor plan ahead of time (50% now versus 54% in 2020). Fewer buyers also say they attended five or more open houses (17% in 2020 versus 7% in 2024) or private home tours (31% in 2020 versus 15% in 2024).

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, dedicated partners and agents, and easier buying, selling, financing, and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®.

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). © 2025 MFTB Holdco, Inc., a Zillow affiliate.

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SOURCE Zillow