Shift Toward Seasonal Norms Could Benefit Buyers, Renters

Rhea-AI Summary

Zillow's latest market report indicates a moderation in the housing market following a period of intense demand. Home values rose 1.3% in October, down from a peak of 2% in July, with the U.S. median home value now at $312,728. Annual growth is at 19.2%, the highest since 2000. Listings are taking longer to sell, with inventory down 17.4% year-over-year. Rent growth is also slowing, at 0.8% month-over-month. The competitive landscape is easing, providing buyers with more time and potentially lower prices.

Positive

• Home value appreciation remains high at 19.2% annually, amounting to a $50,405 increase.
• Typical U.S. home value stands at $312,728, indicating sustained growth.

Negative

• Monthly growth decelerated to 1.3% in October from 2% in July, indicating potential cooling.
• Inventory is down 17.4% year-over-year, which may limit buyer options in the competitive market.

SEATTLE, Nov. 18, 2021 /PRNewswire/ -- After ignoring the annual autumn memo to cool down last year, the housing market is finally showing signs of moderation typically seen in the fall, according to Zillow's® latest market report¹. 

"Home buyers shopping this fall shouldn't expect the same frenzied demand that triggered bidding wars on listings this spring and summer," said Zillow senior economist Jeff Tucker. "The normal seasonal slowdown of autumn has returned, when many families are busy with back-to-school activities and planning for the holidays. Buyers can expect less competition, meaning more time to decide on a house and the potential for prices to fall on listings they've saved on Zillow."  

Although the market is still far hotter than usual, October witnessed normal fall trends of decelerating growth for rents, declining list prices, longer times on market for listings and more homes receiving price cuts before sale. These are indications that seasonality is returning to replace the unfettered growth seen over the past year and a half. 

Home value appreciation slowed in October for the third month in a row, as home values rose 1.3% over September, slower than the all-time high monthly appreciation of 2% in July. The typical home value in the U.S. measured by the Zillow Home Value Index (ZHVI) is now up to $312,728. Annual growth of 19.2% ($50,405) is the highest in Zillow data reaching back to 2000. 

Home values didn't drop in any of the 50 largest U.S. metros, but monthly home value growth decelerated in 42 of them. The slowest monthly growth was seen in Milwaukee (0.1%), San Francisco (0.3%), Buffalo (0.3%) and St. Louis (0.4%), while the fastest was in Raleigh (2.7%), Nashville (2.4%) and Atlanta (2.3%). The average October monthly appreciation in the U.S. from 2015 through 2019 was 0.4%.

Less frenzied market can benefit buyers
Autumn and winter home shopping seasons usually feature fewer homes on the market, along with less competition. The October report shows inventory down 17.4% from last year and contracting by 1.1% since September, after rising from May through September. 

Longer time on the market for listings means buyers have more time to weigh their options and schedule home inspections before purchasing. October listings typically spent 10 days on the market, compared to nine in September and seven in April, May and June. 

Median list prices have fallen since July, and the share of homes that saw a price cut before selling rose slightly over September, as well, now standing at 14.7% — nearly double the year's low point in April. The most recent data on the share of homes that sold above list price shows a monthly decline of 6.6% in September to 47.2%, down from a peak of 51.3% in July. 

In the midst of a surge in demand last fall, the share of listings with a price cut began a long slide downward in October of 2020, while the share of homes sold above list price was climbing skyward. 

Rent growth slows and rents fall in some metros
Rent growth continued on its path of deceleration in October, registering 0.8% month-over-month growth compared to a record high of 2.1% in July. This slowing, too, is in line with seasonal norms — October had the lowest monthly rent appreciation in 2018 and 2019 and saw no growth in 2020 as rents recovered from the shock of the pandemic. Still, the rapid rise in rents since March has pushed annual growth to 14.3%, the highest rate in the series' history, which began in 2015. Typical rents in the U.S. are $1,873, now $234 higher than last October. 

Rents fell from September in eight of the 50 largest U.S. metro areas, compared to just one the month before. The largest monthly drops were in Hartford (-1%), Baltimore (-0.6%) and San Jose (-0.5%), while the largest gains came from Miami (2%), Salt Lake City (1.9%) and Orlando (1.8%). 

Metropolitan Area*	Zillow Home Value Index (ZHVI)	ZHVI – Year Over Year Change	Days on Market	Share of Listings with a Price Cut	Zillow Observed Rent Index (ZORI)	ZORI – Month Over Month Change
United States	$312,728	19.2%	10	14.7%	$1,873	0.8%
New York, NY	$569,191	13.8%	34		$2,712	1.0%
Los Angeles, CA	$851,308	17.9%	12	11.2%	$2,712	0.9%
Chicago, IL	$286,280	13.8%	12	21.3%	$1,698	0.1%
Dallas–Fort Worth, TX	$332,118	23.3%	17		$1,707	0.5%
Philadelphia, PA	$309,597	16.0%	10	17.2%	$1,747	0.9%
Houston, TX	$272,066	18.8%	13		$1,539	0.6%
Washington, D.C.	$520,598	12.8%	9	18.5%	$2,131	0.6%
Miami–Fort Lauderdale, FL	$381,256	19.7%	15	9.8%	$2,479	2.0%
Atlanta, GA	$322,123	24.7%	8	13.2%	$1,882	1.0%
Boston, MA	$605,224	15.5%	8	13.1%	$2,517	0.8%
San Francisco, CA	$1,346,995	17.0%	12	9.9%	$3,082	0.1%
Detroit, MI	$225,066	17.1%	10	17.3%	$1,394	0.9%
Riverside, CA	$525,941	27.7%	12	12.4%	$2,455	0.2%
Phoenix, AZ	$418,170	32.7%	11	13.7%	$1,848	1.1%
Seattle, WA	$695,058	21.8%	7	12.5%	$2,181	0.2%
Minneapolis–St. Paul, MN	$349,595	13.6%	16	16.8%	$1,606	-0.2%
San Diego, CA	$814,289	25.1%	9	13.2%	$2,717	1.3%
St. Louis, MO	$220,861	14.6%	6	16.1%	$1,201	0.3%
Tampa, FL	$316,379	28.7%	6	15.8%	$1,973	1.4%
Baltimore, MD	$349,655	12.8%	8	18.5%	$1,745	-0.6%
Denver, CO	$574,734	22.0%	6	17.2%	$1,907	-0.1%
Pittsburgh, PA	$200,185	17.4%	9	20.0%	$1,279	0.2%
Portland, OR	$532,300	19.2%	7	17.1%	$1,831	-0.1%
Charlotte, NC	$324,163	24.8%	6	14.2%	$1,695	0.5%
Sacramento, CA	$567,023	24.0%	8		$2,220	0.5%
San Antonio, TX	$265,602	20.2%	9	16.0%	$1,387	0.0%
Orlando, FL	$328,555	20.3%	8	13.6%	$1,856	1.8%
Cincinnati, OH	$236,963	17.3%	5	17.5%	$1,430	1.1%
Cleveland, OH	$199,110	16.7%	7	17.4%	$1,228	-0.2%
Kansas City, MO	$259,200	18.5%	4	15.6%	$1,247	1.1%
Las Vegas, NV	$385,325	25.0%	9	16.2%	$1,786	0.7%
Columbus, OH	$266,594	16.9%	4	17.8%	$1,384	0.9%
Indianapolis, IN	$235,663	18.1%	5	16.1%	$1,407	0.1%
San Jose, CA	$1,493,020	16.7%	14	9.4%	$3,087	-0.5%
Austin, TX	$527,134	44.3%	18	13.9%	$1,785	0.6%
Virginia Beach, VA	$295,626	14.6%	21		$1,555	0.8%
Nashville, TN	$374,406	22.9%	5		$1,785	0.9%
Providence, RI	$411,467	20.1%	10	13.3%	$1,800	0.4%
Milwaukee, WI	$251,032	15.5%	33	15.6%	$1,148	-0.1%
Jacksonville, FL	$308,552	24.9%	7	14.9%	$1,694	0.5%
Memphis, TN	$201,846	18.4%	20		$1,441	0.9%
Oklahoma City, OK	$192,346	14.3%	6		$1,221	0.2%
Louisville–Jefferson County, KY	$220,485	13.9%	6	19.1%	$1,103	0.0%
Hartford, CT	$294,010	16.6%	8	15.3%	$1,546	-1.0%
Richmond, VA	$298,298	14.5%	6		$1,471	1.0%
New Orleans, LA	$249,800	13.7%	12	13.9%	$1,346	0.2%
Buffalo, NY	$225,277	22.2%	11	14.2%	$1,149	0.3%
Raleigh, NC	$384,170	28.3%	5	10.0%	$1,661	0.6%
Birmingham, AL	$212,919	15.6%	6	12.1%	$1,310	0.5%
Salt Lake City, UT	$539,824	28.4%	7	19.0%	$1,584	1.9%

*	Table ordered by market size
1	The Zillow Real Estate Market Reports are monthly overviews 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 the Zillow Real Estate Market Reports is 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 is 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 levels can be accessed at www.zillow.com/research/data.

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

FAQ

What does Zillow's November 2021 report say about home values?

The report indicates U.S. home values rose 1.3% in October, with an annual growth of 19.2%.

How is the housing market expected to change in fall 2021?

The market is moderating with less competition and potentially declining prices, typical for the autumn season.

What are the current rental trends according to Zillow's report?

Rent growth is slowing, with a 0.8% increase month-over-month, while annual growth is at 14.3%.

What is the impact of the current housing market on buyers?

Buyers can expect less competition and more time to decide due to the seasonal slowdown.

What is the average time homes are on the market as per the latest report?

Homes typically spent 10 days on the market in October.