Good News for Home Shoppers: Inventory is Growing
Some of the hottest markets in recent years are now seeing the biggest growth in homes for sale.
- There were 3 percent more homes on the market in October than there were a year ago.
- The median home value nationwide is $221,500, up 7.7 percent from this time last year.
- Inventory had declined on an annual basis for 44 straight months before seeing positive growth.
- The median rent is $1,442, down 0.1 percent ($1 per month) year-over-year, the second consecutive month of annual rent declines.
After years of a competitive market characterized by the lack of homes for sale, inventory increased on an annual basis in October.
There were 3 percent more homes for salei across the country than there were a year ago, according to the October Zillow® Real Estate Market Reportii. This comes as welcome news to today’s home shoppers, who have been faced with declining inventory for nearly four years. Last October, inventory fell at a 10.2 percent annual pace. A slight uptick in September (0.1 percent) led to a greater gain in October, and could be a sign of future increases in available inventory.
High cost markets that had been among the nation’s hottest saw some of the biggest gains in inventory. San Jose, California, saw the biggest annual increase in inventory, adding about 1,500 homes for sale to the market to increase inventory by 93.1 percent from last October, when it reached its lowest recorded level. San Diego, San Francisco and Seattle also saw big gains in the number of homes for sale.
“In yet another sign that the housing market is cooling, we’re finally starting to see inventory return after several years of annual declines,” said Zillow Senior Economist Aaron Terrazas. “The combination of tight supply and strong demand have pushed up home values in recent years, but markets always ebb and flow and there is no doubt that the tides that have buoyed sellers are shifting.
Buyers are not out of the woods yet: While there are more homes for sale, rising mortgage rates are quickly eating into what they can afford to pay. First-time buyers have benefited from flat or falling rents over the past year – making it somewhat easier to save for a down payment – but the decline in rents could be short-lived if higher buying costs push some people back toward the rental market.”
Home value appreciation held steady in October at 7.7 percent, with the median U.S. home worth $221,500. San Jose and Las Vegas saw the strongest home value appreciation. These two markets have led the nation’s largest markets in annual home value growth for the past year.
About half of the 35 largest metro areas saw slower home value growth in October 2018 than they did in October 2017. The biggest slowdown was in Seattle, which fell from 12.6 percent annual growth to 7.1 percent. Home value growth increased the most in Indianapolis, from 5.5 percent in 2017 to 11.9 percent in 2018.
Rents declined on an annual basis by 0.1 percent, or $12 per year, to a national median rent of $1,442. Rents fell year over year in 18 of the 35 largest markets, led by Portland, Oregon, where rents fell by 3 percent ($672 annually).
Mortgage rates on Zillow were 4.68 percent at the end of October, just below the high of 4.70 percent set at the beginning of the monthiii. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.
|United States||$ 221,500||7.7%||$ 1,442||-0.1%||3.0%|
|New York, NY||$ 433,700||5.2%||$ 2,378||-1.9%||9.0%|
|Los Angeles-Long Beach-
|$ 648,900||5.0%||$ 2,756||0.7%||31.9%|
|Chicago, IL||$ 223,200||5.2%||$ 1,638||-1.8%||6.2%|
|Dallas-Fort Worth, TX||$ 235,500||10.9%||$ 1,597||-0.6%||14.8%|
|Philadelphia, PA||$ 230,200||4.5%||$ 1,570||-1.4%||-5.5%|
|Houston, TX||$ 202,100||6.5%||$ 1,551||0.3%||5.5%|
|Washington, DC||$ 401,600||3.5%||$ 2,136||-0.8%||0.6%|
|Miami-Fort Lauderdale, FL||$ 279,700||7.8%||$ 1,859||0.3%||10.6%|
|Atlanta, GA||$ 212,800||13.1%||$ 1,397||0.6%||-0.8%|
|Boston, MA||$ 459,600||5.9%||$ 2,369||-1.5%||17.8%|
|San Francisco, CA||$ 967,200||9.6%||$ 3,403||-0.6%||41.6%|
|Detroit, MI||$ 158,300||9.3%||$ 1,197||0.0%||11.6%|
|Riverside, CA||$ 360,700||5.3%||$ 1,906||3.1%||21.6%|
|Phoenix, AZ||$ 260,400||7.5%||$ 1,361||0.6%||-1.9%|
|Seattle, WA||$ 488,600||7.1%||$ 2,173||-2.4%||36.6%|
|Minneapolis-St Paul, MN||$ 264,800||6.9%||$ 1,642||0.6%||2.6%|
|San Diego, CA||$ 589,800||5.4%||$ 2,547||0.0%||43.5%|
|St. Louis, MO||$ 164,500||5.9%||$ 1,141||-1.0%||-1.8%|
|Tampa, FL||$ 209,700||9.7%||$ 1,392||1.6%||9.4%|
|Baltimore, MD||$ 266,600||4.5%||$ 1,741||-0.1%||0.3%|
|Denver, CO||$ 400,900||6.2%||$ 2,060||0.3%||19.0%|
|Pittsburgh, PA||$ 142,700||6.7%||$ 1,088||0.2%||-10.0%|
|Portland, OR||$ 392,300||4.8%||$ 1,836||-3.0%||17.5%|
|Charlotte, NC||$ 201,700||11.1%||$ 1,296||0.2%||2.0%|
|Sacramento, CA||$ 402,600||4.7%||$ 1,847||1.2%||21.9%|
|San Antonio, TX||$ 189,400||6.5%||$ 1,332||-1.0%||11.2%|
|Orlando, FL||$ 232,300||9.8%||$ 1,454||2.1%||5.9%|
|Cincinnati, OH||$ 164,900||6.8%||$ 1,281||-0.1%||3.0%|
|Cleveland, OH||$ 143,900||6.8%||$ 1,142||-0.9%||N/A|
|Kansas City, MO||$ 187,300||9.3%||$ 1,267||-1.0%||-4.6%|
|Las Vegas, NV||$ 276,200||14.7%||$ 1,312||1.5%||-15.9%|
|Columbus, OH||$ 186,000||8.3%||$ 1,338||0.5%||4.8%|
|Indianapolis, IN||$ 159,500||11.9%||$ 1,198||-1.3%||N/A|
|San Jose, CA||$ 1,290,000||17.9%||$ 3,506||-0.8%||93.1%|
|Austin, TX||$ 302,100||6.5%||$ 1,685||-1.1%||7.2%|
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i Zillow Economic Research is replacing its headline inventory measure with a similar alternative. The previous headline Inventory metric was a smoothed, seasonally adjusted measure of median daily unique inventory by month. It could be interpreted as the median number of unique homes available for sale on Zillow on any given day during the month. The new headline inventory metric is a smoothed, seasonally adjusted measure of unique monthly inventory. It can be interpreted as the number of unique homes for sale on Zillow during the month. ii 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. iii Set on October 8, 2018.