Housing inventory saw significant recovery for the second straight month in June, indicating that the market may be on the road to rebalancing after a long stint of being heavily in sellers’ favor, according to the latest Zillow Real Estate Market Report.1 But inventory remains low, and demand is still strong, sending home value appreciation to new record highs for both monthly and annual growth.
Intense demand for houses over the course of the pandemic sent inventory plummeting to a low of 33% below that for April of the prior year, ramping up competition for houses and elevating prices. But inventory has begun to recover since then, with a 3.1% improvement in June, following a 3.9% increase in May. Inventory now stands at 29.2% below 2020 levels.
“Another month of rising housing inventory gives buyers some additional options and a little more bargaining power,” said Jeff Tucker, senior economist at Zillow. “While the level of inventory remains incredibly low by historic norms, it is now on a trajectory that should give buyers reason to hope for a cooldown in price growth this winter, consistent with normal seasonal trends.”
Inventory growth still has a long way to go before it balances out the market, however, as relentless demand pushed appreciation into new territory again in June. Home value appreciation broke annual records for the second month in a row, notching 15% growth over last year — the highest in Zillow data reaching back through 1996. The Zillow Home Value Index (ZHVI) reached $293,349, up $38,341 compared to last June.
Annual appreciation among the nation’s top 50 metropolitan areas ranged from New Orleans’ quite healthy 10.1% to Austin’s astronomical 36.8%, sitting ahead of Phoenix’s 26.6%.
National home value growth continued to accelerate month over month from a revised 1.8% in May to 2% in June, a new record high in the series’ history. Growth in each of the past four months has been far above the pre-pandemic high of 1%, set in the summer of 2005.
Monthly home value growth among major metros ranged from 1.1% in New Orleans to an eye-watering 5.1% in Austin, ahead of San Jose at 3.7% and Las Vegas at 3.6%. Monthly growth accelerated in 48 of the top 50 metros and basically held steady in Pittsburgh and Memphis.
Zillow economists forecast home values to increase by 13.2% by June 2022, a downward revision from the May forecast. June’s forecast calls for 6.02 million home sales in 2021, a 6.6% increase over 2020 and a more bullish prediction than in May.
Rent growth maintained widespread momentum in June as the Zillow Observed Rent Index (ZORI) rose 1.8% month over month, pushing typical U.S. rents to $1,799. A strong recovery in the rental market over the past few months has led to 7.1% annual growth in June — the largest annual increase in the series’ history reaching back to 2015. This is partly due to rebounding demand in pricey urban markets that were previously offering bargains in the midst of downtown office closures. Even discounting a weakened market one year ago, rents have risen 5.8% since March, the highest quarterly growth in Zillow’s data.
The fastest monthly rent growth was seen in Sun Belt standouts Las Vegas (3.6%), Tampa (3.4%), Austin (3.4%) and Phoenix (3.3%). Sunny, relatively affordable areas have led home value appreciation over the past year, and are now seeing outstanding rent growth as well.
Mortgage rates listed by third-party lenders on Zillow began in June at a monthly high of 2.83% and fell to a near all-time low rate of 2.67% on June 11, before finishing the month at 2.72%. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Group Mortgages website by third-party lenders and reflect recent changes in the market.2
|
Metropolitan Area* |
Zillow Home Value Index (ZHVI) |
ZHVI – YoY Change |
Zillow Observed Rent Index (ZORI) |
ZORI – YoY Change |
ZORI – MoM Change |
Inventory – MoM Change |
|
United States |
$293,349 |
15.0% |
$1,799 |
7.1% |
1.8% |
3.1% |
|
New York, NY |
$543,322 |
12.1% |
$2,598 |
-1.9% |
1.9% |
4.0% |
|
Los Angeles–Long Beach–Anaheim, CA |
$813,679 |
16.9% |
$2,507 |
4.9% |
1.6% |
0.6% |
|
Chicago, IL |
$275,702 |
12.3% |
$1,763 |
2.1% |
1.3% |
6.0% |
|
Dallas–Fort Worth, TX |
$306,031 |
16.9% |
$1,604 |
9.9% |
2.4% |
3.0% |
|
Philadelphia, PA |
$299,195 |
16.0% |
$1,705 |
4.9% |
0.9% |
5.7% |
|
Houston, TX |
$252,689 |
12.7% |
$1,477 |
6.6% |
2.1% |
-0.2% |
|
Washington, D.C. |
$509,709 |
13.9% |
$2,086 |
1.8% |
1.7% |
7.2% |
|
Miami–Fort Lauderdale, FL |
$350,016 |
12.5% |
$2,173 |
13.5% |
2.7% |
-6.0% |
|
Atlanta, GA |
$293,123 |
17.4% |
$1,742 |
15.1% |
2.6% |
2.2% |
|
Boston, MA |
$584,745 |
15.3% |
$2,593 |
0.5% |
1.5% |
5.6% |
|
San Francisco, CA |
$1,295,724 |
15.4% |
$2,985 |
-2.0% |
1.9% |
3.2% |
|
Detroit, MI |
$216,912 |
15.7% |
$1,357 |
10.2% |
1.4% |
8.5% |
|
Riverside, CA |
$477,196 |
22.2% |
$2,301 |
18.1% |
2.2% |
3.8% |
|
Phoenix, AZ |
$379,485 |
26.6% |
$1,690 |
20.3% |
3.3% |
1.0% |
|
Seattle, WA |
$657,689 |
20.6% |
$2,062 |
3.6% |
2.5% |
6.4% |
|
Minneapolis–St. Paul, MN |
$343,178 |
12.5% |
$1,604 |
3.3% |
0.6% |
9.4% |
|
San Diego, CA |
$774,299 |
23.3% |
$2,511 |
9.7% |
1.8% |
5.3% |
|
St. Louis, MO |
$213,970 |
15.0% |
$1,238 |
6.7% |
0.2% |
4.7% |
|
Tampa, FL |
$286,808 |
20.6% |
$1,728 |
17.4% |
3.4% |
-0.8% |
|
Baltimore, MD |
$341,307 |
13.3% |
$1,741 |
8.5% |
1.2% |
7.3% |
|
Denver, CO |
$542,496 |
17.9% |
$1,822 |
8.0% |
2.0% |
10.3% |
|
Pittsburgh, PA |
$194,478 |
17.4% |
$1,273 |
4.7% |
1.3% |
6.0% |
|
Portland, OR |
$507,225 |
17.2% |
$1,676 |
7.2% |
1.8% |
6.5% |
|
Charlotte, NC |
$297,395 |
18.3% |
$1,605 |
11.6% |
1.9% |
3.0% |
|
Sacramento, CA |
$530,594 |
21.0% |
$2,087 |
12.1% |
2.0% |
|
|
San Antonio, TX |
$244,351 |
15.1% |
$1,291 |
8.6% |
1.7% |
-1.4% |
|
Orlando, FL |
$297,967 |
11.5% |
$1,723 |
11.2% |
3.0% |
-3.5% |
|
Cincinnati, OH |
$225,131 |
15.4% |
$1,323 |
8.4% |
1.0% |
4.6% |
|
Cleveland, OH |
$192,346 |
17.0% |
$1,268 |
7.3% |
1.0% |
8.8% |
|
Kansas City, MO |
$246,854 |
17.1% |
$1,297 |
7.9% |
1.2% |
8.0% |
|
Las Vegas, NV |
$349,962 |
17.6% |
$1,591 |
19.6% |
3.6% |
2.1% |
|
Columbus, OH |
$254,404 |
14.9% |
$1,338 |
7.5% |
1.1% |
8.9% |
|
Indianapolis, IN |
$222,910 |
16.1% |
$1,353 |
10.7% |
2.0% |
5.9% |
|
San Jose, CA |
$1,433,204 |
16.9% |
$3,015 |
-2.2% |
1.2% |
1.6% |
|
Austin, TX |
$480,328 |
36.8% |
$1,620 |
12.2% |
3.4% |
7.7% |
|
Virginia Beach, VA |
$281,374 |
12.0% |
$1,456 |
11.9% |
1.9% |
5.7% |
|
Nashville, TN |
$336,993 |
14.0% |
$1,666 |
8.7% |
2.1% |
|
|
Providence, RI |
$389,267 |
18.5% |
$1,723 |
13.1% |
0.2% |
5.9% |
|
Milwaukee, WI |
$243,606 |
16.2% |
$1,190 |
5.5% |
1.4% |
24.2% |
|
Jacksonville, FL |
$279,653 |
16.4% |
$1,543 |
15.4% |
3.1% |
1.1% |
|
Memphis, TN |
$190,005 |
15.6% |
$1,480 |
14.6% |
1.0% |
6.7% |
|
Oklahoma City, OK |
$182,407 |
11.0% |
$1,204 |
8.9% |
2.2% |
2.2% |
|
Louisville–Jeffer-son County, KY |
$211,066 |
12.9% |
$1,168 |
5.4% |
0.2% |
4.2% |
|
Hartford, CT |
$284,566 |
16.9% |
$1,494 |
9.1% |
1.5% |
7.1% |
|
Richmond, VA |
$286,938 |
12.3% |
$1,432 |
9.3% |
2.0% |
5.2% |
|
New Orleans, LA |
$236,306 |
10.1% |
$1,315 |
6.2% |
-1.0% |
0.3% |
|
Buffalo, NY |
$216,323 |
$1,185 |
7.0% |
1.0% |
10.3% |
|
|
Raleigh, NC |
$342,209 |
16.9% |
$1,549 |
11.0% |
2.4% |
-4.7% |
|
Birmingham, AL |
$200,677 |
12.2% |
$1,256 |
7.6% |
0.7% |
-0.4% |
|
Salt Lake City, UT |
$499,913 |
23.9% |
$1,522 |
12.7% |
1.7% |
4.6% |
*Table ordered by market size
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