Home value growth eases along with competition
– price relief may be on the horizon
- Homeowners are breaking free from rate lock — new listings rose
nearly 13% since last year.
- Inventory is accumulating, rising 22% over last year and
reducing the pandemic-era deficit.
- Home value appreciation slowed in May, and forecast points to
prices easing over the next year.
SEATTLE, June 12,
2024 /PRNewswire/ -- Home sellers are returning
to the market, but they're finding buyers hesitating, according to
the latest Zillow® market report.1 New listings of
houses outpaced sales in May, allowing buyer competition and price
growth to cool — and further price relief is in the forecast.
"Rate lock's hold seems to be loosening — homeowners who may
have put off listing their homes are done waiting. But just as more
choices sprang up for sale, buyers turned on cruise control," said
Orphe Divounguy, Zillow senior economist. "Inflation has hit
younger households hardest, and stubbornly high rates have pushed a
mortgage out of reach for many first-time buyers. That has cooled
competition for houses. If these trends hold, we're likely to see
price growth flatten or tick down over the next year."
Inventory infusion
New listings from sellers took a
larger-than-average step up, rising 8% from April to May, and now
stands 13% above last year's extremely low level. The effects of
"rate lock" — when owners hold onto their existing homes and
low-rate mortgages — are weakening over time. A Zillow survey of
recent sellers found a large majority (about 80%) were
influenced by life events, such as getting married or having a
child, and not necessarily by optimal financial
conditions.
But buyers aren't matching sellers' enthusiasm; sales in May
were 6% lower than last year.2 This helped partially
restock the housing shelves, with the number of homes on the market
rising 22% compared to last year's near record-low level. Inventory
is still 34% below pre-pandemic norms, but that's the smallest
deficit in more than three years.
New listings rose the most annually on the West Coast and
coastal South, in San Diego,
Seattle, Charlotte, Raleigh and the San
Francisco Bay Area. Compared to last year, total inventory
accumulated the most in major Florida markets, where strong new construction
has helped refill the coffers. Buyers saw more listings month over
month in every major market except Miami.
Competition and appreciation ease
As a result,
competition among buyers eased in May, and home price appreciation
cooled with it. Growth in typical home values slowed from 4.4% year
over year in April to 3.9% in May — still a healthy, normal rate —
while monthly appreciation ticked down from 1.2% in April to 0.8%
in May. Home values are still up significantly — more than 45% —
since before the pandemic.
Prices have fallen year over year in New Orleans, Austin and San
Antonio, while appreciation is strongest in the Northeast
and coastal California.
Renters struggling to save up for a down payment may get a
slight reprieve in the coming year. Zillow forecasts home values
will end 2024 up 0.4% on the year, and tick down 1.4% through May
2025.
What it means for buyers and sellers
Zillow's market
heat index shows the nation is becoming a bit friendlier for
buyers and is headed toward "neutral" territory, but sellers still
hold a slight advantage. Buffalo, Hartford and San
Jose are the top markets for sellers among the 50 largest
metro areas. New Orleans,
Miami, Jacksonville and Memphis are all tilted toward buyers, giving
those in the market better leverage in
negotiations.
Nationwide, nearly one-quarter of all homes for sale received a
price cut in May, the highest share in the past six years for this
time of year. There's a good chance that buyers can purchase a
lingering property for less than list price. This environment makes
experienced agents all the more valuable for both buyers and
sellers, to find and negotiate deals for buyers, and to price and
market properties correctly for sellers.
Size
rank
|
Metropolitan
Area
|
May Zillow Home
Value Index
(ZHVI) (Raw)
|
ZHVI
Change,
Year over Year
(YoY)
|
ZHVI
Change
Since Before the
Pandemic
|
Market
Favors**
|
Share of
Listings with a
Price Cut
|
Inventory
Change, YoY
|
New Listings
Change, YoY
|
0
|
United
States
|
$360,310
|
3.9 %
|
45.3 %
|
Sellers
|
23.9 %
|
22.1 %
|
12.6 %
|
1
|
New York, NY
|
$658,603
|
7.1 %
|
31.6 %
|
Strong
sellers
|
13.8 %
|
-4.6 %
|
7.3 %
|
2
|
Los Angeles,
CA
|
$965,506
|
8.9 %
|
42.8 %
|
Strong
sellers
|
18.1 %
|
21.1 %
|
21.3 %
|
3
|
Chicago, IL
|
$321,733
|
7.0 %
|
35.7 %
|
Strong
sellers
|
21.1 %
|
3.0 %
|
6.6 %
|
4
|
Dallas, TX
|
$379,252
|
1.1 %
|
46.9 %
|
Sellers
|
32.0 %
|
28.9 %
|
12.5 %
|
5
|
Houston, TX
|
$309,854
|
1.6 %
|
38.6 %
|
Neutral
|
28.3 %
|
25.8 %
|
11.6 %
|
6
|
Washington,
DC
|
$569,602
|
4.7 %
|
30.7 %
|
Strong
sellers
|
19.7 %
|
11.3 %
|
16.7 %
|
7
|
Philadelphia,
PA
|
$362,178
|
6.7 %
|
43.8 %
|
Sellers
|
20.6 %
|
5.8 %
|
12.2 %
|
8
|
Miami, FL
|
$490,511
|
6.6 %
|
62.0 %
|
Buyers
|
24.5 %
|
43.5 %
|
10.8 %
|
9
|
Atlanta, GA
|
$386,798
|
4.0 %
|
56.3 %
|
Neutral
|
28.0 %
|
37.5 %
|
23.4 %
|
10
|
Boston, MA
|
$701,740
|
8.3 %
|
42.5 %
|
Strong
sellers
|
16.9 %
|
9.7 %
|
15.6 %
|
11
|
Phoenix, AZ
|
$461,390
|
4.2 %
|
53.0 %
|
Sellers
|
35.2 %
|
13.6 %
|
26.6 %
|
12
|
San Francisco,
CA
|
$1,188,868
|
5.4 %
|
25.5 %
|
Strong
sellers
|
18.6 %
|
27.1 %
|
29.0 %
|
13
|
Riverside,
CA
|
$585,999
|
6.5 %
|
52.1 %
|
Sellers
|
22.9 %
|
23.7 %
|
16.7 %
|
14
|
Detroit, MI
|
$254,098
|
6.3 %
|
40.4 %
|
Sellers
|
18.1 %
|
6.2 %
|
7.8 %
|
15
|
Seattle, WA
|
$754,332
|
6.4 %
|
44.8 %
|
Strong
sellers
|
22.8 %
|
27.1 %
|
31.4 %
|
16
|
Minneapolis,
MN
|
$376,461
|
1.3 %
|
27.4 %
|
Strong
sellers
|
21.7 %
|
22.7 %
|
15.4 %
|
17
|
San Diego,
CA
|
$962,786
|
11.1 %
|
56.8 %
|
Sellers
|
22.9 %
|
44.4 %
|
32.5 %
|
18
|
Tampa, FL
|
$381,414
|
2.8 %
|
61.8 %
|
Buyers
|
36.2 %
|
60.6 %
|
24.7 %
|
19
|
Denver, CO
|
$593,732
|
1.9 %
|
36.1 %
|
Sellers
|
32.9 %
|
32.2 %
|
24.5 %
|
20
|
Baltimore,
MD
|
$387,455
|
3.8 %
|
31.3 %
|
Sellers
|
21.9 %
|
14.7 %
|
16.3 %
|
21
|
St. Louis,
MO
|
$253,143
|
4.5 %
|
40.2 %
|
Strong
sellers
|
19.5 %
|
12.8 %
|
5.8 %
|
22
|
Orlando, FL
|
$397,859
|
3.3 %
|
54.6 %
|
Neutral
|
30.0 %
|
49.9 %
|
20.7 %
|
23
|
Charlotte,
NC
|
$386,181
|
5.1 %
|
59.1 %
|
Neutral
|
24.9 %
|
27.3 %
|
30.4 %
|
24
|
San Antonio,
TX
|
$288,333
|
-2.2 %
|
34.7 %
|
Neutral
|
32.5 %
|
29.3 %
|
3.9 %
|
25
|
Portland, OR
|
$554,465
|
1.6 %
|
32.3 %
|
Strong
sellers
|
25.8 %
|
23.0 %
|
14.2 %
|
26
|
Sacramento,
CA
|
$586,997
|
4.3 %
|
34.5 %
|
Strong
sellers
|
25.0 %
|
19.8 %
|
21.4 %
|
27
|
Pittsburgh,
PA
|
$217,968
|
6.1 %
|
33.3 %
|
Sellers
|
23.1 %
|
5.6 %
|
13.0 %
|
28
|
Cincinnati,
OH
|
$287,754
|
5.2 %
|
47.5 %
|
Strong
sellers
|
22.0 %
|
16.1 %
|
12.1 %
|
29
|
Austin, TX
|
$463,202
|
-4.1 %
|
42.4 %
|
Neutral
|
30.7 %
|
14.7 %
|
14.6 %
|
30
|
Las Vegas,
NV
|
$429,369
|
7.1 %
|
44.4 %
|
Sellers
|
23.3 %
|
3.5 %
|
23.1 %
|
31
|
Kansas City,
MO
|
$306,002
|
3.9 %
|
45.8 %
|
Strong
sellers
|
23.3 %
|
27.8 %
|
15.5 %
|
32
|
Columbus, OH
|
$314,999
|
5.5 %
|
49.7 %
|
Strong
sellers
|
24.3 %
|
25.9 %
|
21.8 %
|
33
|
Indianapolis,
IN
|
$281,991
|
3.5 %
|
50.7 %
|
Sellers
|
27.9 %
|
21.2 %
|
12.2 %
|
34
|
Cleveland,
OH
|
$230,953
|
7.5 %
|
46.3 %
|
Strong
sellers
|
18.7 %
|
0.4 %
|
7.1 %
|
35
|
San Jose, CA
|
$1,644,202
|
12.7 %
|
41.7 %
|
Strong
sellers
|
14.5 %
|
21.0 %
|
28.5 %
|
36
|
Nashville,
TN
|
$445,552
|
2.1 %
|
48.7 %
|
Neutral
|
32.8 %
|
17.5 %
|
13.5 %
|
37
|
Virginia Beach,
VA
|
$351,401
|
5.5 %
|
41.0 %
|
Sellers
|
19.5 %
|
17.1 %
|
10.1 %
|
38
|
Providence,
RI
|
$483,313
|
8.2 %
|
51.6 %
|
Strong
sellers
|
15.4 %
|
9.0 %
|
11.0 %
|
39
|
Jacksonville,
FL
|
$360,547
|
1.4 %
|
52.3 %
|
Buyers
|
32.7 %
|
45.6 %
|
16.2 %
|
40
|
Milwaukee,
WI
|
$348,435
|
6.5 %
|
42.3 %
|
Strong
sellers
|
11.4 %
|
12.8 %
|
17.1 %
|
41
|
Oklahoma City,
OK
|
$235,307
|
2.4 %
|
42.9 %
|
Neutral
|
27.2 %
|
23.1 %
|
12.6 %
|
42
|
Raleigh, NC
|
$448,858
|
3.0 %
|
53.4 %
|
Sellers
|
29.2 %
|
35.3 %
|
29.1 %
|
43
|
Memphis, TN
|
$242,300
|
1.8 %
|
46.6 %
|
Buyers
|
27.1 %
|
24.2 %
|
5.1 %
|
44
|
Richmond, VA
|
$372,353
|
5.0 %
|
46.9 %
|
Strong
sellers
|
20.7 %
|
15.9 %
|
12.6 %
|
45
|
Louisville,
KY
|
$258,522
|
3.7 %
|
37.0 %
|
Sellers
|
23.9 %
|
27.7 %
|
20.1 %
|
46
|
New Orleans,
LA
|
$241,191
|
-5.9 %
|
5.0 %
|
Buyers
|
27.0 %
|
22.3 %
|
5.8 %
|
47
|
Salt Lake City,
UT
|
$548,530
|
2.7 %
|
46.3 %
|
Sellers
|
30.1 %
|
19.4 %
|
14.2 %
|
48
|
Hartford, CT
|
$363,763
|
11.6 %
|
56.3 %
|
Strong
sellers
|
12.0 %
|
15.9 %
|
16.2 %
|
49
|
Buffalo, NY
|
$264,111
|
7.5 %
|
51.4 %
|
Strong
sellers
|
14.5 %
|
1.8 %
|
2.6 %
|
50
|
Birmingham,
AL
|
$254,484
|
0.0 %
|
37.6 %
|
Sellers
|
24.1 %
|
22.0 %
|
12.0 %
|
*
|
Table ordered by
market size
|
**
|
Based on Zillow
Market Heat Index
|
|
|
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
|
Tracked
by Zillow's Sales Count NowCast.
|
About Zillow Group:
Zillow Group, Inc. (Nasdaq: Z and
ZG) is reimagining real estate to make home a reality for more and
more people. As the most visited real estate website in
the United States, Zillow and its
affiliates help people find and get the home they want by
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#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
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