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U.S. Housing Inventory Falls to New Lows After Rebounding Before Home Shopping Season

Moderate inventory gains ahead of home shopping season were erased as new listings slowed, and buyer demand may be picking back up

- For-sale inventory continued to fall in September after a mild recovery earlier this year. There are 102,112 fewer homes on the market in the U.S. than there were last year, a 6.4% year-over-year drop.

- The median home in the U.S. is worth $231,000, up 4.8% from this time last year. Accelerating quarterly growth indicates that we may be reaching a turning point after a cooldown over the past several months.

- Rent growth remains stable, up 2.2% year-over-year to $1,597.

SEATTLE, Oct. 17, 2019 /PRNewswire/ -- The gains from a modest buildup of inventory earlier this year were more than erased during the 2019 home shopping season, according to the September Zillow® Real Estate Market Report.i

Inventory grew year-over-year in each month between September 2018 and February 2019, likely due to softening demand after a period of rapid price growth. This reversed a stretch of 44 consecutive months of inventory declines dating back to January 2015.

Those modest gains were wiped out during this year's home shopping season as inventory has fallen to its lowest level since at least 2013.ii A dearth of new listings at the beginning of the home shopping season – new monthly listings were 8.4% lower than the previous year in April and 10.6% lower in May – contributed to the current shortage. In addition, recent data on existing home sales and new housing starts have shown signs of increased buyer demand, perhaps buoyed by historically low mortgage rates.

The market looks different at the bottom than the top. The inventory buildup and subsequent reversal was especially severe among the bottom tier of homes, which are often targeted by first-time and low-income buyers. Inventory growth among this group of homes reached 6.7% in October 2018, but fell 10.3% annually in September 2019. Buyers looking for homes in this price range are also less likely to see listings with a price cut – 12.7% of bottom-tier homes had a price cut in September, compared to 15.7% of middle-tier homes and 17.3% of top-tier homes.

U.S. annual home value growth slowed for the ninth consecutive month, falling to 4.8% year-over-year – the lowest since April 2013. However, the annualized rate of quarterly growth accelerated once again to 4.3%, further evidence that the market may be reaching a turning point after a sustained cooling-off period.

"Housing appears to have renewed its place as a bright spot contributing to continued U.S. economic growth. The return of accelerating quarterly price growth, rising sales numbers and increasing home builder confidence and activity all point to closing out 2019 on a healthy note, despite greater volatility over the course of this year," said Zillow Director of Economic Research Skylar Olsen. "A few markets have seen strong re-acceleration – led by Austin – and Seattle and Los Angeles are close to reversing the recent fall in home values that have been seen in many formerly hot West Coast markets. In contrast, Las Vegas – one of the more unpredictable markets in the country this decade – continues to put on the brakes. The story of the Bay Area metros losing steam after a frenzied period is well-known, but it's actually Las Vegas that has slowed the most dramatically since June."

Home values fell again in San Jose (down 10.7% year-over-year) and San Francisco (down 2.5%). Indianapolis (up 8.1%), Austin (up 7.6%) and Charlotte (up 7.1%) were the fastest-growing large markets.

Rents rose 2.2% from a year ago to $1,597. The pace of annual rent growth has remained remarkably stable and has not dropped below 1.7% or risen above 2.4% at any point during the past 12 months. Rents are growing the fastest in Las Vegas (up 6.4% year-over-year) and Phoenix (up 6.2%), but were flat in Houston – the only one of the 35 biggest markets in the country where rents are not up from last year.  

Mortgage rates listed on Zillow fell in September. Rates dropped as low as 3.53% on September 4 before recovering somewhat to end the month at 3.64%. This was 16 basis points lower than a peak of 3.8% on September 2. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect recent changes in the market.

Metropolitan Area

Zillow Home
Value Index,
September
2019

ZHVI
Year-
over-Year
Change

Zillow Rent
Index,
August
2019

ZRI Year-
over-
Year
Change

Total
Inventory
Year-over-
Year
Change

Bottom-Tier
Inventory
Year-over-
Year
Change

United States

$231,000

4.8%

$1,597

2.2%

-6.4%

-10.3%

New York, NY

$445,300

3.2%

$2,289

1.0%

-2.1%

-6.0%

Los Angeles-Long Beach-Anaheim, CA

$656,000

1.2%

$2,612

0.4%

-7.4%

-10.1%

Chicago, IL

$226,600

2.2%

$1,620

2.8%

-0.4%

-3.8%

Dallas-Fort Worth, TX

$244,400

4.4%

$1,444

1.7%

0.4%

18.3%

Philadelphia, PA

$234,600

2.0%

$1,502

3.3%

-11.5%

-19.7%

Houston, TX

$207,500

3.1%

$1,379

0.0%

-2.1%

6.0%

Washington, DC

$410,800

2.3%

$1,983

2.8%

-18.2%

-20.3%

Miami-Fort Lauderdale, FL

$286,700

2.9%

$1,856

2.8%

-3.4%

-4.6%

Atlanta, GA

$223,200

6.4%

$1,459

4.6%

1.7%

-2.4%

Boston, MA

$465,700

1.7%

$2,429

4.7%

-7.6%

-22.7%

San Francisco, CA

$934,700

-2.5%

$3,168

1.7%

-4.8%

-17.8%

Detroit, MI

$163,200

3.8%

$1,222

3.2%

7.6%

21.0%

Riverside, CA

$372,500

2.5%

$1,913

3.4%

-11.9%

-12.8%

Phoenix, AZ

$271,600

5.0%

$1,416

6.2%

-15.2%

-18.0%

Seattle, WA

$494,100

1.4%

$2,043

2.5%

-20.8%

-38.7%

Minneapolis-St Paul, MN

$272,800

3.7%

$1,497

1.5%

-7.0%

-6.7%

San Diego, CA

$593,700

0.6%

$2,527

3.4%

-14.4%

-17.1%

St. Louis, MO

$168,600

3.2%

$1,010

1.7%

-18.1%

-16.3%

Tampa, FL

$219,200

5.1%

$1,397

3.6%

-8.0%

-7.9%

Baltimore, MD

$268,000

0.6%

$1,610

0.5%

-10.4%

-10.7%

Denver, CO

$411,700

3.2%

$1,782

1.8%

0.6%

13.9%

Pittsburgh, PA

$146,800

3.2%

$1,097

1.5%

-18.4%

-22.5%

Portland, OR

$397,600

1.4%

$1,662

0.1%

-12.7%

-17.3%

Charlotte, NC

$213,200

7.1%

$1,332

4.5%

-5.3%

-24.1%

Sacramento, CA

$414,800

3.1%

$1,799

4.3%

-16.7%

-31.4%

San Antonio, TX

$197,300

4.8%

$1,216

1.0%

7.1%

5.4%

Orlando, FL

$242,100

4.9%

$1,422

3.7%

-11.6%

-10.8%

Cincinnati, OH

$172,000

5.1%

$1,158

4.3%

-16.9%

-20.5%

Cleveland, OH

$149,100

4.5%

$1,073

4.5%

-6.8%

-2.2%

Kansas City, MO

$193,600

4.1%

$1,122

1.9%

N/A

N/A

Las Vegas, NV

$278,100

1.8%

$1,340

6.4%

20.0%

36.6%

Columbus, OH

$196,700

6.8%

$1,185

0.9%

-14.3%

-16.1%

Indianapolis, IN

$170,500

8.1%

$1,094

1.6%

N/A

N/A

San Jose, CA

$1,142,600

-10.7%

$3,332

0.3%

-1.8%

-17.6%

Austin, TX

$323,400

7.6%

$1,595

3.0%

-14.1%

6.5%

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. 

In addition to Zillow.com, Zillow operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG) and headquartered in Seattle.

Zillow and Zillow Offers are registered trademarks of Zillow, Inc.

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 inventory data dates back to January 2013.

 

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