SEATTLE, July 17, 2020 /PRNewswire/ -- Pre-pandemic forecasts for a frantic home shopping season were put on ice in early spring. But now the frenzy is here -- homes are flying off the market as heavy demand combines with limited inventory, according to the June Zillow® Real Estate Market Reportⁱ.

Home values continued their steady, upward trajectory in June, growing 4.3% year over year to $252,178. That's a slightly faster pace than last month, and the same rate as June 2019 in what has been a stable period for home values. 

Phoenix is the hottest top-50 market by a good margin. Home values there are up 9.6% year over year, followed by Birmingham (+7.6%) and Memphis (+7.5%). Chicago (+0.8% year over year) and San Francisco (+1.1%) are the coolest large markets. 

Home values in San Jose and Seattle have seen incredible turnarounds over the past year. San Jose home values were falling 9.9% annually as of last June, and they're now growing at a 5% pace. In Seattle, values were down 0.7% year over year last June, and are now up 7.4% -- fourth most in the U.S. among large metros. 

"Buyers have come roaring back to the housing market after the initial shock of the pandemic and layoffs faded, and all signs indicate the hot spring selling season we anticipated has shifted to the summer," said Zillow economist Jeff Tucker. "But those shoppers are competing over a shockingly small pool of homes, causing prices to resume their upward climb after a little softness this spring." 

Spring is typically a season of rent growth, but that hasn't been the case this year. During the past five years, rents have grown about $30 on average between March and June. This year, the typical rent has fallen $5 nationally over that period, and almost $60 in San Jose and New York. 

Despite the slight dip nationally, rents grew in 27 of the 50 largest U.S. metros this spring. And rents are higher than a year ago in 43 of the top 50 metros, led by Memphis (+6% year over year), Phoenix (+5.1%) and Riverside (+4.6%). Rents are down from last year in San Jose (-1.2%), New York (-1%), San Francisco (-0.5%), Washington, D.C. (-0.2%), Baltimore (-0.2%), Houston (-0.1%) and Oklahoma City (-0.1%). 

"Rents have felt some impact from the pandemic, stagnating through the spring when we normally see them make most of their annual gains," Tucker said. "Boosted unemployment benefits and eviction moratoriums have helped keep renters in their homes so far, but as those expire there's plenty of uncertainty about what comes next."

Zillow's weekly data as of the week ending July 11 revealed a small glimmer of hope for inventory as new listings grew 2.1% from the previous week. Still, total inventory fell 1.1% from a week earlier and is now 24.1% lower than at the same time last year, a sign that buyer demand is outpacing the flow of new listings. 

Limited inventory is tilting the market toward sellers. Homes typically lasted just 19 days on the market before a contract to sell was signed -- a new record in Zillow data that dates back to 2018 -- and only 4.2% of active listings had undergone a price cut, down from 5.6% a year earlier. Newly pending sales were up 15% month over month as of the last week of June but have since dipped, down 9.4% from the previous month as of the week ending July 11. 

Mortgage rates listed by third-party lenders on Zillow started the month at 3.38% and rose to a peak of 3.48% on June 5. Rates ended June at their monthly low of 3.23%. 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 marketⁱⁱ.

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ⁱ 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. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/research/data.
ⁱⁱ Zillow Group Marketplace, Inc. is a licensed mortgage broker, NMLS #1303160.

SOURCE Zillow