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Zillow: ‘Dearth of inventory, price hikes pose challenges for home shoppers’

Rent hikes finally ease after record-breaking annual growth

  • Home value appreciation accelerates again to a record 19.9% annual gain.
  • Inventory plunges below 900,000 listings, a record low — down 42.4% from January 2020.
  • Annual rent growth of 15.9% ticks down from peak; rents are nearly flat from last month.

Home buyers face another challenging shopping season to navigate, as Zillow’s latest monthly report reveals record-breaking low inventory and unprecedented price growth.

The Zillow Home Value Index (ZHVI) rose 1.5% from December to January to $325,677, up 19.9% from a year ago. The annual growth rate represents an all-time high over the last 20 years, and the monthly pace continued to accelerate after reaching a low of 1.2% in November. If monthly price growth were to hold steady at January’s pace, annual growth in 2022 would be 19%. Home values are up 30.9% — nearly $77,000 — since January 2020, on the eve of the pandemic.

“Home buyers today are making bids and closing deals despite some of the most challenging conditions ever: record-few homes for sale to choose from, priced at double-digit gains from last year, financed at sharply rising mortgage rates,” said Jeff Tucker, senior economist at Zillow. “It remains to be seen how long buyers can weather this storm, and how long homeowners will watch values rise before deciding to list. Neither have blinked yet. Expect another sizzling hot spring shopping season.”

The rising heat in the market is widespread. Monthly home value growth accelerated from December to January in 38 of the nation’s 50 largest metropolitan areas. Among these, the fastest monthly growth was in NashvilleSan Diego and Las Vegas, all at 2.5%. The slowest growth was in MilwaukeeNew York and Washington, D.C., all at 0.7%.

Inventory plunges to record lows

Home shoppers hoping for an injection of options and relief from heightened competition after December’s inventory drought instead saw the biggest decline in at least three years. Active inventory dropped 13% — the second straight double-digit monthly drop. Though inventory typically dips in the winter, active inventory is now 22% lower than a year ago, and 42.4% lower than January 2020.

A sharp cutback in new listings hitting the market — down 19% from December — was the main cause. January’s flow of new listings was lower than any month since at least the beginning of 2019.

Sales of existing homes in January are expected to be somewhat lower than in December and January 2021. But at a seasonally adjusted annual rate, sales are starting the year roughly on par with full-year 2021 levels, which was the best year for existing sales since 2006. New home sales took a breather late last year as builders worked to complete the backlog of orders they booked in 2020, when they sold the most new homes in 14 years.

“If supply chains can untangle, builders should be able to complete and sell more homes this year than last,” Tucker said.

Rent growth slows to a crawl

Monthly rent growth slowed dramatically, falling from 0.9% in November and December to a nearly flat 0.1% in January, the lowest rate seen since October 2020. Year-over-year rent growth was 15.9%, slightly lower than a record-high 16% in December, making typical rent $1,856 per month.

Metropolitan
Area*

Zillow
Home
Value Index
(ZHVI)

ZHVI –
Year-
over-
Year
Change

ZHVI –
Month-
over-
Month
Change

For-Sale
Inventory
Year-over-
Year
Change 

New For-
Sale
Inventory
Year-Over-
Year
Change

Zillow
Observed
Rent
Index
(ZORI)

ZORI –
Year-
over-
Year
Change

United States

$325,677

19.9%

1.5%

-22.0%

-16.9%

$1,856

15.9%

New York, NY

$577,647

12.2%

0.7%

-29.3%

-26.9%

$2,788

17.3%

Los Angeles– Long Beach– Anaheim, CA

$878,396

18.5%

1.2%

-33.7%

-22.7%

$2,769

14.3%

Chicago, IL

$292,436

14.0%

0.9%

-26.8%

-20.7%

$1,770

11.1%

Dallas–Fort Worth, TX

$351,550

26.8%

2.2%

-21.7%

-17.6%

$1,704

18.3%

Philadelphia, PA

$315,442

14.2%

0.8%

-11.4%

-13.2%

$1,725

11.3%

Houston, TX

$282,014

19.6%

1.2%

-15.9%

-15.0%

$1,509

12.0%

Washington, D.C.

$529,871

11.6%

0.7%

-12.6%

-21.1%

$2,117

11.7%

Miami–Fort Lauderdale, FL

$404,601

23.5%

2.0%

-49.9%

-28.6%

$2,597

30.6%

Atlanta, GA

$344,420

28.6%

2.2%

-28.6%

-19.2%

$1,866

20.9%

Boston, MA

$617,198

14.1%

0.9%

-31.0%

-25.5%

$2,701

13.2%

San Francisco, CA

$1,391,474

18.3%

1.2%

-25.8%

-21.3%

$3,069

10.5%

Detroit, MI

$229,141

14.9%

1.1%

-6.7%

-11.0%

$1,377

10.7%

Riverside, CA

$544,220

26.7%

1.8%

-7.5%

-9.3%

$2,491

17.7%

Phoenix, AZ

$434,184

30.7%

1.3%

-7.2%

-4.0%

$1,864

25.6%

Seattle, WA

$733,604

23.1%

1.9%

-29.4%

-41.9%

$2,133

16.9%

Minneapolis–St. Paul, MN

$357,512

12.3%

0.8%

-6.5%

-18.1%

$1,585

5.9%

San Diego, CA

$857,991

24.9%

2.5%

-29.0%

-17.9%

$2,788

17.1%

St. Louis, MO

$226,743

14.4%

1.2%

-25.3%

-16.5%

$1,199

10.4%

Tampa, FL

$334,537

30.5%

2.4%

-26.2%

-9.1%

$1,975

28.2%

Baltimore, MD

$356,266

11.6%

0.8%

-10.6%

-12.2%

$1,782

12.2%

Denver, CO

$598,233

23.0%

1.7%

-37.7%

-19.3%

$1,875

15.0%

Pittsburgh, PA

$203,384

15.1%

0.9%

-8.1%

-5.4%

$1,318

7.8%

Portland, OR

$547,041

18.3%

1.2%

-17.5%

-18.1%

$1,799

12.2%

Charlotte, NC

$344,238

27.7%

2.1%

-16.1%

-19.2%

$1,705

19.1%

Sacramento, CA

$583,329

21.8%

1.4%

-38.1%

-41.3%

$2,188

11.7%

San Antonio, TX

$309,475

23.1%

1.8%

-20.2%

-13.9%

$1,389

15.7%

Orlando, FL

$346,877

24.9%

2.1%

-32.1%

-9.1%

$1,885

23.4%

Cincinnati, OH

$242,958

15.7%

1.0%

-11.6%

-15.9%

$1,391

9.8%

Cleveland, OH

$202,044

15.7%

0.9%

-35.7%

-22.8%

$1,244

9.0%

Kansas City, MO

$267,621

18.3%

1.3%

-9.3%

-18.2%

$1,253

10.0%

Las Vegas, NV

$405,542

28.5%

2.5%

-26.0%

-4.6%

$1,819

24.8%

Columbus, OH

$275,240

16.2%

1.2%

-8.0%

-12.5%

$1,374

10.5%

Indianapolis, IN

$249,065

20.0%

1.9%

-7.3%

-5.7%

$1,366

12.2%

San Jose, CA

$1,578,375

18.6%

1.8%

-37.3%

-22.2%

$3,031

10.3%

Austin, TX

$558,699

45.8%

2.3%

18.7%

-25.5%

$1,805

22.7%

Virginia Beach, VA

$305,036

15.1%

1.2%

-22.2%

-25.8%

$1,518

12.9%

Nashville, TN

$403,333

28.9%

2.5%

-34.4%

$1,757

19.5%

Providence, RI

$421,969

18.3%

1.0%

-36.7%

-22.1%

$1,779

14.0%

Milwaukee, WI

$252,346

12.1%

0.7%

-17.5%

$1,231

8.1%

Jacksonville, FL

$327,636

28.8%

2.3%

-21.9%

-11.1%

$1,718

23.0%

Memphis, TN

$212,725

19.7%

1.5%

-1.2%

-8.0%

$1,465

15.1%

Oklahoma City, OK

$201,016

16.6%

1.5%

-4.2%

-14.7%

$1,240

12.1%

Louisville–Jefferson County, KY

$227,188

14.2%

1.0%

-5.2%

-15.3%

$1,175

9.9%

Hartford, CT

$299,964

15.1%

1.0%

-37.3%

-23.8%

$1,532

8.4%

Richmond, VA

$309,300

14.3%

1.3%

-18.8%

-24.1%

$1,493

13.0%

New Orleans, LA

$255,960

14.2%

1.0%

-24.5%

-15.9%

$1,426

16.0%

Buffalo, NY

$227,420

18.4%

0.8%

-13.2%

-10.7%

$1,096

8.3%

Raleigh, NC

$410,121

31.7%

2.2%

-37.2%

-25.2%

$1,648

18.4%

Birmingham, AL

$222,928

17.1%

1.3%

-25.7%

-22.6%

$1,268

11.0%

Salt Lake City, UT

$560,944

27.6%

1.5%

-19.5%

-27.6%

$1,645

19.4%

*Table ordered by market size

Zillow®’s latest monthly report1

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. The data in the Zillow Real Estate Market Report is aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas, dating back to 2000. 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 ease.

Zillow Group’s affiliates and subsidiaries include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®, ShowingTime®, Bridge Interactive®, dotloop®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).


SOURCE Zillow

 

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