Competition is slowing faster than normal as
fall sets in
- U.S. home values fell slightly (0.1%) in September, the first
monthly dip since February.
- Homes are on the market a median of 15 days before sellers
accept an offer — half the time of pre-pandemic norms.
- Effects of "rate lock" seem to be easing as new listings grow
closer to normal.
- Price cuts became more common and inventory ticked up as
competition eased.
SEATTLE, Oct. 12,
2023 /PRNewswire/ -- Home values took an
uncharacteristic step down in September, albeit a small one,
according to the latest Zillow® market report1.
Competition is easing faster than normal this fall as buyers
contend with the highest mortgage rates in more than 22
years.
"Mortgage rates approaching 8% are taking the wind out of the
market's sails, pushing monthly mortgage payments beyond many
buyers' budgets," said Jeff Tucker,
Zillow senior economist. "While attractive listings are still
moving at a brisk clip, competition among buyers is fading quickly
due to the shock of mortgage rates on top of normal autumn
seasonality."
Home values tick down
U.S. home values took a
short step backward from August to September, falling 0.1%. That's
not nearly as pronounced as the 0.8% monthly decline seen in
September 2022, but a step backward
is still unusual for this time of year. Between 2015 and 2019,
monthly growth in September hovered between 0.1% and
0.4%2.
The typical home value now stands at $350,091 nationally, up roughly 2% from this time
last year. Of the 50 largest major metropolitan areas, 31 have home
values higher than a year ago.
Affordability-based growth
The strongest annual home
value appreciation is in relatively affordable markets, led by
Hartford (up 11.1%), Milwaukee (8.5%), Providence (6.4%) and Virginia Beach (6.2%).
The largest declines are in pandemic-era hot spots Austin (-10%), Las
Vegas (-4.3%), Phoenix
(-4.2%) and San Antonio (-2.5%),
as well as New Orleans
(-8.8%).
'Rate lock' abating?
A distinct lack of new
inventory has troubled the market for more than a year. But some
homeowners may not be able to delay sales any longer, potentially
lessening the effect of "rate lock" on their decision. Rate lock
refers to the incentive for existing homeowners not to sell,
because their existing mortgages have lower interest rates than
today's prevailing rates.
Despite high and rising mortgage rates, the flow of new options
for buyers is coming slightly closer in line with seasonal norms.
Compared to 2019, new listings were down nearly 18% this September,
an improvement over deficits of 20% in August and 27% in
July.
New listings fell by about 6% from August to September, but the
step down is usually bigger — monthly declines averaged 13% in 2018
and 2019.
The number of total listings for sale rose slightly in
September, notching a 0.2% increase from August. But buyers still
have far fewer choices than they normally would; inventory levels
are about 10% lower than last year and 41% below that of
2019.
Competition eases as fall settles in
Home
shoppers are getting a little more time to find and decide on a
home, but attractive listings are still moving relatively quickly.
Median time on the market before a listing goes pending is now 15
days — two days longer than in August. But that's still two days
faster than last September and roughly half the time that shoppers
enjoyed before the pandemic.
Home-buying conditions have continued to ease since late summer.
Roughly 24% of listings in September received a price cut, a slight
uptick from August and higher than 21% and 22% in 2018 and 2019,
respectively.
August closed-sales data, the most recent available, showed fewer
homes selling above their list price, too — about 38% versus 40% in
July.
Rents are still climbing slowly
The
latest Zillow rental market report shows annual
growth at 3.2%, a bit slower than pre-pandemic norms of around
4%.
Metropolitan
Area*
|
September
Zillow Home
Value Index
(ZHVI) (Raw)
|
ZHVI
Change,
Month
over
Month
(MoM)
|
ZHVI
Change,
Year over
Year
(YoY)
|
Median
Days to
Pending
|
Share of
Listings
with a
Price
Cut
|
August
Share of
Listings
Sold
Over List
Price
|
Total
Inventory
Change,
YoY
|
United
States
|
$350,091
|
-0.1 %
|
2.1 %
|
15
|
23.9 %
|
37.7 %
|
-10.2 %
|
New York, NY
|
$628,239
|
0.2 %
|
3.0 %
|
27
|
14.1 %
|
56.9 %
|
-29.0 %
|
Los Angeles,
CA
|
$917,534
|
0.3 %
|
3.6 %
|
15
|
18.6 %
|
57.9 %
|
-26.4 %
|
Chicago, IL
|
$307,616
|
0.0 %
|
5.0 %
|
10
|
25.2 %
|
46.3 %
|
-23.3 %
|
Dallas, TX
|
$371,171
|
-0.6 %
|
-1.8 %
|
20
|
32.1 %
|
27.2 %
|
3.4 %
|
Houston, TX
|
$304,378
|
-0.4 %
|
-1.2 %
|
22
|
28.5 %
|
21.9 %
|
-0.8 %
|
Washington,
DC
|
$543,643
|
-0.4 %
|
3.0 %
|
8
|
22.1 %
|
49.9 %
|
-30.3 %
|
Philadelphia,
PA
|
$346,955
|
0.0 %
|
6.1 %
|
10
|
22.4 %
|
52.2 %
|
-17.4 %
|
Miami, FL
|
$473,552
|
0.5 %
|
5.7 %
|
22
|
19.2 %
|
17.8 %
|
-0.4 %
|
Atlanta, GA
|
$376,250
|
0.0 %
|
1.5 %
|
18
|
26.6 %
|
33.6 %
|
-14.9 %
|
Boston, MA
|
$661,736
|
0.1 %
|
6.1 %
|
8
|
19.0 %
|
62.9 %
|
-22.8 %
|
Phoenix, AZ
|
$452,238
|
0.3 %
|
-4.2 %
|
21
|
27.6 %
|
23.9 %
|
-38.4 %
|
San Francisco,
CA
|
$1,131,297
|
-0.3 %
|
-1.8 %
|
14
|
19.2 %
|
62.8 %
|
-20.9 %
|
Riverside,
CA
|
$560,687
|
0.2 %
|
1.0 %
|
18
|
21.4 %
|
47.2 %
|
-25.7 %
|
Detroit, MI
|
$243,527
|
0.0 %
|
3.9 %
|
10
|
23.1 %
|
49.5 %
|
-22.0 %
|
Seattle, WA
|
$708,660
|
-0.4 %
|
-0.3 %
|
11
|
26.5 %
|
44.4 %
|
-30.2 %
|
Minneapolis,
MN
|
$371,292
|
-0.6 %
|
1.3 %
|
19
|
28.1 %
|
50.7 %
|
-13.5 %
|
San Diego,
CA
|
$909,383
|
0.8 %
|
5.1 %
|
11
|
21.2 %
|
52.1 %
|
-32.2 %
|
Tampa, FL
|
$377,066
|
0.1 %
|
-0.5 %
|
17
|
32.1 %
|
20.6 %
|
-2.3 %
|
Denver, CO
|
$577,773
|
-0.5 %
|
-1.2 %
|
15
|
32.6 %
|
34.1 %
|
-5.0 %
|
Baltimore,
MD
|
$373,842
|
-0.3 %
|
4.1 %
|
8
|
23.9 %
|
53.3 %
|
-19.0 %
|
St. Louis,
MO
|
$243,483
|
-0.3 %
|
5.2 %
|
7
|
23.8 %
|
54.5 %
|
-0.8 %
|
Orlando, FL
|
$389,863
|
0.1 %
|
1.5 %
|
15
|
28.6 %
|
22.2 %
|
-5.6 %
|
Charlotte,
NC
|
$373,367
|
0.1 %
|
0.8 %
|
11
|
22.6 %
|
44.6 %
|
-8.8 %
|
San Antonio,
TX
|
$288,571
|
-0.9 %
|
-2.5 %
|
30
|
32.9 %
|
19.3 %
|
12.7 %
|
Portland, OR
|
$540,160
|
-0.6 %
|
-0.6 %
|
16
|
29.2 %
|
37.8 %
|
-14.2 %
|
Sacramento,
CA
|
$565,772
|
-0.4 %
|
-2.3 %
|
12
|
25.2 %
|
48.3 %
|
-34.7 %
|
Pittsburgh,
PA
|
$208,211
|
-0.1 %
|
3.5 %
|
10
|
26.7 %
|
36.8 %
|
-15.0 %
|
Cincinnati,
OH
|
$273,618
|
-0.3 %
|
5.5 %
|
6
|
25.2 %
|
45.1 %
|
-11.8 %
|
Austin, TX
|
$467,519
|
-1.4 %
|
-10.0 %
|
47
|
31.3 %
|
16.1 %
|
-6.7 %
|
Las Vegas,
NV
|
$407,923
|
0.3 %
|
-4.3 %
|
15
|
23.5 %
|
28.8 %
|
-45.5 %
|
Kansas City,
MO
|
$293,608
|
-0.4 %
|
5.0 %
|
6
|
25.7 %
|
46.4 %
|
-9.2 %
|
Columbus, OH
|
$304,069
|
-0.2 %
|
4.5 %
|
6
|
26.8 %
|
51.7 %
|
-11.1 %
|
Indianapolis,
IN
|
$271,981
|
-0.2 %
|
2.1 %
|
11
|
33.2 %
|
31.7 %
|
-9.4 %
|
Cleveland,
OH
|
$217,221
|
-0.2 %
|
5.3 %
|
7
|
22.5 %
|
49.1 %
|
-14.2 %
|
San Jose, CA
|
$1,485,704
|
0.3 %
|
|
11
|
16.0 %
|
69.0 %
|
-22.6 %
|
Nashville,
TN
|
$434,447
|
-0.2 %
|
-1.7 %
|
21
|
34.3 %
|
21.3 %
|
-13.1 %
|
Virginia Beach,
VA
|
$336,427
|
-0.2 %
|
6.2 %
|
21
|
21.5 %
|
51.8 %
|
-15.7 %
|
Providence,
RI
|
$456,117
|
0.2 %
|
6.4 %
|
9
|
18.0 %
|
65.0 %
|
-22.8 %
|
Jacksonville,
FL
|
$355,843
|
-0.1 %
|
-1.9 %
|
32
|
30.5 %
|
17.4 %
|
-1.7 %
|
Milwaukee,
WI
|
$331,023
|
-0.3 %
|
8.5 %
|
20
|
18.6 %
|
64.6 %
|
-10.0 %
|
Oklahoma City,
OK
|
$228,284
|
-0.3 %
|
3.6 %
|
15
|
28.9 %
|
32.4 %
|
8.6 %
|
Raleigh, NC
|
$436,142
|
-0.2 %
|
-0.9 %
|
12
|
30.8 %
|
40.5 %
|
-25.7 %
|
Memphis, TN
|
$235,027
|
-0.4 %
|
-0.6 %
|
25
|
26.9 %
|
25.3 %
|
12.7 %
|
Richmond, VA
|
$353,407
|
-0.3 %
|
4.9 %
|
6
|
21.6 %
|
54.7 %
|
-19.8 %
|
Louisville,
KY
|
$249,780
|
-0.2 %
|
4.3 %
|
9
|
27.5 %
|
35.1 %
|
-6.7 %
|
New Orleans,
LA
|
$241,570
|
-1.4 %
|
-8.8 %
|
31
|
25.8 %
|
15.2 %
|
12.8 %
|
Salt Lake City,
UT
|
$533,367
|
-0.4 %
|
-1.7 %
|
20
|
35.8 %
|
32.3 %
|
-15.4 %
|
Hartford, CT
|
$340,706
|
0.3 %
|
11.1 %
|
6
|
16.2 %
|
77.4 %
|
-16.8 %
|
Buffalo, NY
|
$250,275
|
-0.1 %
|
4.8 %
|
11
|
18.4 %
|
75.7 %
|
-13.4 %
|
Birmingham,
AL
|
$251,263
|
-0.5 %
|
0.3 %
|
15
|
24.0 %
|
33.6 %
|
-4.9 %
|
*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.
2 Not seasonally adjusted.
About Zillow Group:
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(NASDAQ: Z and ZG) is
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and its affiliates help people find and get the home they
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Zillow affiliate.
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SOURCE Zillow