SEATTLE, May 18, 2021 /PRNewswire/ -- Seemingly
endless demand and low supply have driven record-breaking home
value appreciation over the past year, Zillow's® latest Market
Report1 shows. April pushed the envelope even
further: Annual home value growth for a typical U.S. home is 11.6%,
the highest seen since 2005.
Today's rapid rise in prices may recall that of the mid-2000s,
stoking unfounded fears of another overheated market. Google
searches for "housing bubble" reached their highest point in nearly
three years in April. But unlike the run-up to the mortgage crisis,
this market is built on strong fundamentals with long legs, said
Zillow economist Jeff
Tucker.
"Both of these hot markets saw extreme price appreciation in a
relatively short period of time. But that's where the similarities
end," Tucker said. "Unlike the combination of speculators and
people spending beyond their means with non-traditional loans in
2004 and 2005, today's homebuying demand is driven by
well-qualified buyers locking in traditional, fixed-rate mortgages.
Builders are firing on all cylinders to meet the excess demand
brought by low mortgage rates and millions of Millennial buyers
jockeying for limited homes, but after more than a decade of
underbuilding, homes will remain scarce until existing homeowners
feel more comfortable selling or prices rise enough to restore
balance."
This spring, homes are selling at record pace despite the
enormous leaps in home values. Nationally, it typically only takes
seven days after listing for a seller to accept an offer, while the
Midwest markets of Kansas City,
Columbus and Cincinnati are seeing listings disappear in
just three days.
U.S. home values measured by Zillow's Home Value Index (ZHVI)
reached $281,370 in April. Monthly
appreciation has been growing since May, and April's 1.3% increase
over March is the largest jump in Zillow data reaching back to
1996.
Sun Belt and Mountain West markets lead major metros in annual
appreciation, notably Austin
(25.5%), Phoenix (20.4%) and
Salt Lake City (18.3%), though 39
of the top 50 metros are seeing double-digit increases over the
year. Boise, Idaho, leads the
top-100 metros with 32.5% annual value growth.
First-time buyer Tiauna Hansen
and her fiancé, Tyler Hensley,
estimate they placed offers on 15 homes before finally closing on a
2-bedroom, 1-bathroom house near Boise in April. The young couple had been
under contract to purchase another home when the appraisal came
back lower than their offer price and the deal fell
through.
"We were so excited to buy our own home," says Hansen. "We had
already made plans to add on to that house and build a workshop,
only to have to start our search all over again. But that
experience ultimately left us more determined, and led us to the
house we're in now, which is perfect for us."
The couple used an FHA loan and down payment assistance to
purchase their new home at full asking price. Now they have plenty
of room for their dog to roam, while they plan their wedding for
next September.
The couple's story will resonate with thousands of shoppers
struggling in today's market, but despite abundant stories of
bidding wars, not every house is selling above list. Of all home
sales closed in February (the last month with full data), 28.6%
sold at or above their initial list price. That's more than twice
the share that sold above list in February last year, but it still
means the other 71.4% sold at list price or below. More than half
of homes sold above list price in four metros: San Francisco, San
Jose, Seattle and
Salt Lake City. Metros with the
lowest share of homes sold above list price are Miami (11%), Orlando (13%) and Las Vegas (15%).
Inventory fell 1.4% month over month, continuing a trend of
monthly drops that began in August. Available listings are now down
30.3% year over year. Making an aggressive or creative offer,
mastering search technology and working with a knowledgeable local
agent can help raise shoppers' chances of success, according to a
recent Zillow survey.
Zillow economists expect another year of staggering home value
appreciation ahead of us, forecasting 11.8% growth through April 2022. Existing home sales in 2021 are
predicted to be 10.3% higher than in 2020.
Rent growth is returning with a vengeance, with a 1.5% monthly
spike that's larger than any in Zillow records reaching back
through 2014. Annual rent growth reached 3%, the largest
year-over-year growth since March
2020, to put typical U.S. rent at $1,704 -- $49
higher than last year.
Monthly rent growth was led by Sun Belt standouts Austin (2.9%), Memphis (2.5%), Tampa (2.4%) and Phoenix (2.4%), and monthly rent appreciation
picked up pace or held steady in all but nine of the top 50 U.S.
metros. April also marked the second or third month in a row for
monthly rent growth in expensive coastal metros including
San Francisco, New York, San
Jose and Seattle, though
none of those have returned to pre-pandemic levels.
Mortgage rates did not retreat to all-time lows in April, but
they were close. Rates listed by third-party lenders on Zillow
began April at a monthly high of 2.89%, dropped down to 2.66% on
April 22, and ended at 2.71%.
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 market.2
Metropolitan
Area*
|
Zillow Home Value
Index
|
ZHVI - YoY
Change
|
ZHVI - MoM
Change
|
Zillow Observed
Rent Index
|
ZORI - YoY
Change
|
% of
Homes
Sold Above
List
(Feb. 2021)
|
United
States
|
$281,370
|
11.6%
|
1.3%
|
$1,704
|
3.0%
|
29%
|
New York,
NY
|
$530,082
|
9.5%
|
0.9%
|
$2,507
|
-6.7%
|
28%
|
Los Angeles-Long
Beach-Anaheim, CA
|
$783,610
|
10.4%
|
1.3%
|
$2,404
|
1.0%
|
42%
|
Chicago,
IL
|
$270,352
|
9.5%
|
1.2%
|
$1,721
|
-1.5%
|
17%
|
Dallas-Fort Worth,
TX
|
$289,582
|
11.9%
|
1.9%
|
$1,519
|
4.8%
|
29%
|
Philadelphia,
PA
|
$288,947
|
13.3%
|
1.3%
|
$1,628
|
3.4%
|
33%
|
Houston,
TX
|
$241,698
|
9.1%
|
1.0%
|
$1,404
|
1.9%
|
16%
|
Washington,
DC
|
$498,649
|
11.5%
|
1.3%
|
$1,972
|
-2.8%
|
40%
|
Miami-Fort
Lauderdale, FL
|
$336,714
|
9.1%
|
1.0%
|
$2,010
|
7.2%
|
11%
|
Atlanta,
GA
|
$280,038
|
13.0%
|
1.6%
|
$1,645
|
10.2%
|
29%
|
Boston, MA
|
$563,149
|
11.6%
|
1.3%
|
$2,454
|
-4.1%
|
39%
|
San Francisco,
CA
|
$1,235,705
|
7.4%
|
1.5%
|
$2,805
|
-7.7%
|
54%
|
Detroit,
MI
|
$209,728
|
11.0%
|
1.0%
|
$1,300
|
8.3%
|
26%
|
Riverside,
CA
|
$460,833
|
16.2%
|
2.0%
|
$2,158
|
14.9%
|
46%
|
Phoenix,
AZ
|
$355,822
|
20.4%
|
1.7%
|
$1,559
|
13.4%
|
33%
|
Seattle,
WA
|
$627,290
|
14.6%
|
1.7%
|
$1,873
|
-3.0%
|
52%
|
Minneapolis-St Paul,
MN
|
$331,152
|
9.9%
|
0.9%
|
$1,565
|
0.8%
|
40%
|
San Diego,
CA
|
$729,318
|
16.5%
|
1.9%
|
$2,344
|
6.8%
|
45%
|
St. Louis,
MO
|
$205,604
|
11.5%
|
1.4%
|
$1,168
|
4.4%
|
30%
|
Tampa, FL
|
$271,353
|
15.8%
|
1.7%
|
$1,617
|
11.1%
|
19%
|
Baltimore,
MD
|
$332,992
|
11.2%
|
1.3%
|
$1,660
|
6.1%
|
33%
|
Denver, CO
|
$517,395
|
12.9%
|
1.7%
|
$1,728
|
3.5%
|
44%
|
Pittsburgh,
PA
|
$185,063
|
13.0%
|
1.4%
|
$1,225
|
3.2%
|
20%
|
Portland,
OR
|
$482,708
|
13.3%
|
1.8%
|
$1,608
|
3.6%
|
45%
|
Charlotte,
NC
|
$281,335
|
14.4%
|
1.7%
|
$1,545
|
7.1%
|
33%
|
Sacramento,
CA
|
$507,735
|
14.3%
|
1.7%
|
$1,906
|
9.6%
|
50%
|
San Antonio,
TX
|
$233,083
|
10.4%
|
1.6%
|
$1,278
|
4.5%
|
23%
|
Orlando,
FL
|
$285,049
|
8.3%
|
0.9%
|
$1,636
|
5.6%
|
13%
|
Cincinnati,
OH
|
$218,672
|
14.6%
|
1.4%
|
$1,279
|
6.8%
|
26%
|
Cleveland,
OH
|
$184,224
|
13.5%
|
1.5%
|
$1,184
|
6.1%
|
26%
|
Kansas City,
MO
|
$241,203
|
14.6%
|
1.7%
|
$1,184
|
5.6%
|
37%
|
Las Vegas,
NV
|
$330,880
|
9.4%
|
1.0%
|
$1,460
|
11.3%
|
15%
|
Columbus,
OH
|
$244,220
|
12.4%
|
1.3%
|
$1,301
|
5.9%
|
37%
|
Indianapolis,
IN
|
$212,334
|
13.7%
|
1.4%
|
$1,295
|
8.9%
|
26%
|
San Jose,
CA
|
$1,364,273
|
5.9%
|
0.9%
|
$2,829
|
-6.6%
|
53%
|
Austin, TX
|
$441,931
|
25.5%
|
4.2%
|
$1,504
|
3.9%
|
49%
|
Virginia Beach,
VA
|
$275,562
|
10.3%
|
1.2%
|
$1,414
|
8.9%
|
29%
|
Nashville,
TN
|
$320,818
|
11.0%
|
1.3%
|
$1,623
|
4.2%
|
27%
|
Providence,
RI
|
$375,407
|
15.0%
|
1.5%
|
$1,723
|
10.5%
|
41%
|
Milwaukee,
WI
|
$232,744
|
13.9%
|
1.2%
|
$1,210
|
3.2%
|
33%
|
Jacksonville,
FL
|
$265,105
|
11.7%
|
1.4%
|
$1,430
|
9.9%
|
18%
|
Memphis,
TN
|
$182,194
|
13.2%
|
1.4%
|
$1,421
|
11.8%
|
37%
|
Oklahoma City,
OK
|
$175,922
|
8.9%
|
1.1%
|
$1,129
|
5.2%
|
21%
|
Louisville-Jefferson
County, KY
|
$205,647
|
10.6%
|
1.1%
|
$1,127
|
5.5%
|
23%
|
Hartford,
CT
|
$274,468
|
13.6%
|
1.6%
|
$1,485
|
6.2%
|
31%
|
Richmond,
VA
|
$279,336
|
10.5%
|
1.2%
|
$1,350
|
6.2%
|
39%
|
New Orleans,
LA
|
$231,224
|
9.1%
|
0.6%
|
$1,248
|
6.6%
|
17%
|
Buffalo,
NY
|
$202,040
|
14.1%
|
1.4%
|
$1,152
|
6.8%
|
48%
|
Raleigh,
NC
|
$327,048
|
12.3%
|
1.5%
|
$1,483
|
6.8%
|
38%
|
Birmingham,
AL
|
$195,643
|
10.7%
|
1.0%
|
$1,168
|
6.2%
|
28%
|
Salt Lake City,
UT
|
$466,768
|
18.3%
|
2.3%
|
$1,444
|
7.4%
|
50%
|
*Table ordered by
market size
|
1 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.
2 Zillow Group Marketplace, Inc. is a licensed mortgage
broker, NMLS #1303160.
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is reimagining real estate to make it easier to
unlock life's next chapter.
As the most-visited real estate website in the United States, Zillow® and its affiliates
offer customers an on-demand experience for selling, buying,
renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently launched
Zillow Homes, Inc., a licensed brokerage entity, to streamline
Zillow Offers transactions.
Zillow Group's brands, affiliates and subsidiaries include
Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™,
Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287
(www.nmlsconsumeraccess.org).
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SOURCE Zillow