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Home Value Growth Expected to Re-Accelerate Just in Time For Home Shopping Season
Annual U.S. home value growth has slowed in each month since April 2018
- The typical home in the U.S. is worth $245,193, up 3.8% from a year ago.
- There were 1,500,262 homes listed for sale in January, down 8% from a year ago.
- Typical U.S. rent grew 2.3% to $1,602.
Feb 20, 2020
SEATTLE, Feb. 20, 2020 /PRNewswire/ -- Annual U.S. home value growth slowed for the 21st consecutive month in January, but you have to squint to spot the difference this time around. When paired with inventory that is hovering near record lows, the nearly two-year slowdown in the housing market may be coming to an end right as home shopping season kicks off.
U.S. home values grew 3.8% year-over-year to $245,193, less than one-hundredth of a percentage point slower than the previous month, according to the January Zillow® Real Estate Market Report. Annual home value appreciation has slowed in each month since April 2018, but this is the smallest drop from one month to the next during that period.
And while the number of homes listed for sale increased from record lows a month earlier, inventory is down 8% annually -- the biggest annual drop since March 2018. There were 1,500,262 homes on the market in January, up 4,295 from the previous month but down 130,310 year-over-year.
This persistently low inventory is a key reason why home value growth is expected to speed up once again. The economy has remained strong, mortgage rates are low and buyers will be competing for a limited number of homes this home shopping season.
"As the economic storm clouds on the horizon in early 2019 cleared up, we saw buyers return in droves, taking advantage of ultra-low mortgage rates," said Zillow economist Jeff Tucker. "Our first look at 2020 data suggests that we could see the most competitive home shopping season in years, as buyers are already competing over near-record-low numbers of homes for sale. That is likely to mean more multiple-offer situations, and that buyers will have a harder time finding the perfect fit for their families. The good news for buyers is that low mortgage rates are helping to make home ownership more affordable, and home builders are responding to the hot housing market by starting construction on more homes than at any time since 2007."
Home values are growing faster than they were a month ago in about half of large markets (17 of the top 35). The hottest large markets are Phoenix (up 6.7%), Columbus (6.2%), Charlotte (5.4%) and Cincinnati (5%). Home values fell year-over-year in San Jose for the 12th consecutive month. But its Bay Area neighbor, San Francisco, saw home values grow 1% year-over-year, breaking a streak of declines that dated back to May 2019.
Inventory fell in all but three top-35 metros -- San Antonio (+7.7%), Detroit (+6.4%) and Chicago (+0.3%). Inventory was hit the hardest in Seattle (-27.6%), Phoenix (-24.5%) and San Diego (-23.1%).
Rent growth remained stable. The typical rent is now $1,602, up 2.3% year over year and just $1 more than last month. Rents are growing faster than a year ago in 28 of the 35 largest U.S. metros, led by Phoenix (+7.9% annually) -- also the fastest-growing for-sale market -- Pittsburgh (+7%), Cincinnati (+5.7%) and Las Vegas (+5.7%).
Mortgage rates listed by third-party lenders on Zillow rose to a peak of 3.77% on January 31 after starting the month at 3.70%. Rates reached their monthly low on January 24 at 3.51%. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site by third-party lenders and reflect recent changes in the market.
Metropolitan Area | Zillow Home | ZHVI Year- | Zillow Rent | ZRI Year- | Inventory |
United States | $245,193 | 3.8% | $1,602 | 2.3% | -8.0% |
New York, NY | $481,486 | 0.8% | $2,297 | 1.7% | -3.6% |
Los Angeles-Long | $674,786 | 2.3% | $2,625 | 1.8% | -18.5% |
Chicago, IL | $238,978 | 1.0% | $1,590 | 1.2% | 0.3% |
Dallas-Fort Worth, | $253,299 | 2.2% | $1,465 | 2.2% | -5.0% |
Philadelphia, PA | $248,836 | 3.1% | $1,518 | 3.2% | -13.3% |
Houston, TX | $217,159 | 2.4% | $1,402 | 0.9% | -4.6% |
Washington, DC | $434,156 | 3.1% | $1,979 | 2.3% | -11.0% |
Miami-Fort | $299,657 | 1.8% | $1,853 | 0.8% | -7.9% |
Atlanta, GA | $239,115 | 4.8% | $1,482 | 4.7% | -0.5% |
Boston, MA | $490,327 | 1.9% | $2,350 | 2.9% | -12.6% |
San Francisco, CA | $1,094,095 | 1.0% | $3,121 | 0.5% | -15.4% |
Detroit, MI | $179,078 | 3.6% | $1,208 | 1.6% | 6.4% |
Riverside, CA | $382,754 | 3.1% | $1,942 | 3.2% | -16.2% |
Phoenix, AZ | $288,708 | 6.7% | $1,457 | 7.9% | -24.5% |
Seattle, WA | $531,353 | 3.1% | $2,026 | 2.4% | -27.6% |
Minneapolis-St | $292,183 | 3.9% | $1,531 | 3.4% | -3.3% |
San Diego, CA | $606,086 | 3.7% | $2,559 | 4.2% | -23.1% |
St. Louis, MO | $179,019 | 3.2% | $1,042 | 5.0% | -8.5% |
Tampa, FL | $229,468 | 3.9% | $1,450 | 5.1% | -14.9% |
Baltimore, MD | $291,130 | 1.2% | $1,613 | 0.9% | -10.4% |
Denver, CO | $437,537 | 2.3% | $1,800 | 2.8% | -13.9% |
Pittsburgh, PA | $157,983 | 4.5% | $1,175 | 7.0% | -11.1% |
Portland, OR | $418,051 | 1.9% | $1,689 | 2.7% | -16.2% |
Charlotte, NC | $237,051 | 5.4% | $1,362 | 5.3% | -9.7% |
Sacramento, CA | $427,699 | 4.0% | $1,827 | 4.5% | -18.9% |
San Antonio, TX | $203,705 | 4.0% | $1,229 | 1.3% | 7.7% |
Orlando, FL | $256,306 | 3.7% | $1,456 | 4.4% | -11.8% |
Cincinnati, OH | $185,009 | 5.0% | $1,206 | 5.7% | -15.4% |
Cleveland, OH | $158,559 | 4.5% | $1,066 | 1.8% | -8.0% |
Kansas City, MO | $203,873 | 3.5% | $1,138 | 3.3% | -12.0% |
Las Vegas, NV | $290,420 | 1.2% | $1,357 | 5.7% | -11.7% |
Columbus, OH | $210,615 | 6.2% | $1,188 | -0.2% | -7.0% |
Indianapolis, IN | $179,994 | 4.7% | $1,103 | 2.8% | N/A |
San Jose, CA | $1,194,002 | -2.9% | $3,296 | 0.3% | -18.6% |
Austin, TX | $337,558 | 4.0% | $1,632 | 4.8% | -14.1% |
About Zillow
Zillow® is transforming how people buy, sell, rent and finance homes by creating seamless real estate transactions for today's on-demand consumer. Zillow is the leading real estate and rental marketplace and a trusted source for data, inspiration and knowledge among both consumers and real estate professionals.
Zillow's proprietary data, technology and industry partnerships put Zillow at nearly every major point of the home shopping experience, helping consumers search for and get into their new home faster. Zillow now offers a fully integrated home shopping experience that includes access to for sale and rental listings, Zillow Offers®, which provides a new, hassle-free way to buy and sell eligible homes directly through Zillow; and Zillow Home Loans, Zillow's affiliated lender that provides an easy way to receive mortgage pre-approvals and financing. Zillow Premier Agent instantly connects buyers and sellers with its network of real estate professionals to help guide them through the home shopping process. For renters, Zillow's innovations are streamlining the way people search, tour, apply and pay rent for leased properties.
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SOURCE Zillow
For further information: Alex Lacter, Zillow, press@zillow.com