U.S. Home Values ​​Drop for Second Month as Competition Eases » FINCHANNEL

In addition to affordability issues, recent volatility in mortgage rates has made it difficult for many borrowers to qualify for a loan or even plan their purchase.

“Substantial day-to-day and week-to-week rate movements mean that many potential buyers are able to qualify for a loan one week, but not the next, or vice versa” , said skylar olsen, chief economist at Zillow. “Even buyers able to afford a home at current rates could feel frozen, waiting for mortgage rates to fall dramatically again, as they did from late June to mid-July, when rates fell. by 50 basis points in just two weeks.”

Given that the share of median household income needed to pay monthly mortgage costs now exceeds the 30% level considered a financial burden, the uncertainty itself could dampen a large population of buyers who might otherwise still afford to go ahead with a loan. This issue is likely to persist until markets stabilize and return to some semblance of normality, Olsen said.

The value of a typical home in the United States fell 0.3% from July to August and now stands at $356,054as measured by gross2Zillow Home Value Index. This is the largest monthly decline since 2011 and follows a 0.1% decline in July. Appreciation has retreated since April’s peak, but typical home values ​​are still up 14.1% from a year ago and 43.8% since August 2019before the pandemic.

Typical mortgage payments paint an even grimmer picture of the astronomical growth in spending by new homeowners over the past three years. The historic rise in home prices during the pandemic, combined with this year’s surge in mortgage rates, has pushed the monthly mortgage payment of a typical newly purchased home, including insurance and taxes, from $897 in August 2019 at $1,643 – an increase of 83%.

Reduced competition has lingering homes in the market. The usual time before an ad is put on hold is now 16 days3three days longer than in July – a bigger increase than the market usually sees at this time of year – and up from an all-time low of six days in April.

Inventories rose 1% from July. But it is by far the smallest monthly increase since February. A significant drop in the flow of new listings into the market over the past two months indicates that the slight increase in total inventory is the result of homes taking longer to sell, rather than additional selling activity. Mortgage rates hovering around 6% are likely deterring many homeowners from selling their current home and entering the market as buyers.

Affordable Midwestern markets generally retain their heat while competition cools fastest in Western markets, especially those that cost the most or have seen the most extreme appreciation during the pandemic.

Home values ​​rose from July to August in 12 of the 50 largest U.S. markets, led by birmingham (0.9%), Indianapolis (0.5%), Cincinnati (0.4%) and Louisville (0.2%). These four all have a typical home value well below $300,000. Miamiin fifth place, breaks the trend here, but also has by far the strongest growth in rents over the past three years, which could fuel buying demand.

Values ​​fell the most month over month in San Francisco (-3.4%), Los Angeles (-3.4%), Sacramento (-3.2%) and Salt Lake City (-2.6%).

The wait time for registrations has seen similar trends, decreasing since July by one day in Milwaukee and stay stable in Saint Louis, Cincinnati, Columbus and Louisville. The markets with the greatest increase are Vegas at 11 days, Austin (ten), Phoenix (8) and Riverside (seven).

Sellers seem to be adapting to the new market paradigm. The share of listings with a price drop has only increased by one percentage point since July, compared with much stronger increases in previous months.

About 28% of listings nationwide received a price reduction, slightly more than the August 2019 rate of 22%. The share of ads with a price drop is highest in Salt Lake City, Phoenix, Vegas and Austin. The markets with the lowest price drop rates are Milwaukee, New York, Hartford and Boston.

Rent growth continued to slow in August, with typical rent of $2,090 now 12.3% above last August – down from February’s peak of 17.2% annual growth. The annual growth in rents is strongest in Miami (21.9%), New York (17.9%), Orlando (17.5%) and San Diego (17.1%).

Metropolitan area*
August Zillow Home Value Index (ZHVI) (raw)
August ZHVI Annual Change (raw)
August ZHVI Monthly Change (Raw)
Typical days in the market (raw)
Share of ads with a price drop (gross)
Zillow Observed Rent Index (ZORI)
Variation of the rent index observed by Zillow from one year to the next
United States
$356,054
14.1%
-0.3%
16
27.6%
$2,090
12.3%
New York, NY
$620,146
9.2%
-0.2%
31
15.7%
$3,342
17.9%
Los Angeles, CA
$897,864
6.8%
-3.4%
23
26.0%
$3,024
12.2%
Chicago, IL
$312,487
9.4%
-0.5%
17
29.1%
$1,979
9.2%
Dallas–Fort Worth, Texas
$391,567
19.0%
-1.4%
15
36.1%
$1,882
13.5%
Philadelphia, Pennsylvania
$338,914
9.8%
-0.2%
13
23.6%
$1,869
9.3%
Houston, TX
$312,579
15.3%
-0.5%
18
31.3%
$1,633
7.6%
washington d.c.
$551,504
6.2%
-0.6%
14
27.9%
$2,336
8.5%
Miami–Fort Lauderdale, Florida
$474,291
28.2%
0.2%
21
21.4%
$2,910
21.9%
Atlanta, Georgia
$383,035
20.3%
-0.3%
16
31.2%
$2,020
11.1%
Boston, MA
$654,482
8.6%
-0.9%
11
20.0%
$2,910
10.9%
San Francisco, California
$1,388,170
3.0%
-3.4%
22
25.1%
$3,331
6.9%
Detroit, Michigan
$239,990
7.3%
-0.9%
13
28.9%
$1,481
8.8%
Riverside, California
$575,434
11.0%
-0.7%
27
29.8%
$2,666
10.1%
Phoenix, Arizona
$463,902
12.1%
-1.5%
29
43.1%
$1,968
9.3%
Seattle, WA
$758,170
10.1%
-2.6%
34.5%
$2,382
10.4%
Minneapolis–St. Paul, Minnesota
$372,261
6.0%
-1.0%
19
27.7%
$1,683
5.0%
San Diego, California
$886,147
9.9%
-0.9%
21
33.1%
$3,190
17.1%
St. Louis, Missouri
$244,361
10.1%
0.0%
6
25.2%
$1,328
11.0%
Tampa, Florida
$391,497
26.4%
0.0%
15
37.0%
$2,166
15.2%
Baltimore, MD
$378,396
8.0%
-0.1%
11
26.9%
$1,830
5.7%
Denver, CO
$624,226
10.4%
-1.1%
38.8%
$2,058
8.7%
Pittsburgh, Pennsylvania
$209,583
4.0%
-1.1%
15
28.8%
$1,386
8.3%
Portland, OR
$565,117
6.7%
-1.5%
18
33.2%
$1,977
9.8%
Charlotte, North Carolina
$390,203
21.8%
-0.1%
11
33.6%
$1,866
14.4%
Sacramento, California
$591,777
4.6%
-3.2%
21
37.4%
$2,348
7.0%
San Antonio, TX
$339,620
16.4%
-0.1%
17
33.9%
$1,527
10.1%
Orlando, Florida
$402,774
26.6%
0.0%
14
31.9%
$2,124
17.5%
Cincinnati, Ohio
$263,460
11.3%
0.4%
5
26.7%
$1,501
12.8%
Cleveland, Ohio
$221,716
11.2%
0.1%
8
26.6%
$1,393
9.1%
Kansas City, Missouri
$287,917
11.6%
-0.1%
seven
26.9%
$1,399
10.7%
Las Vegas, Nevada
$443,694
16.9%
-1.5%
27
41.9%
$1,892
8.1%
Columbus, Ohio
$304,089
13.9%
0.1%
5
27.1%
$1,525
11.1%
Indianapolis, Indiana
$273,959
16.7%
0.5%
seven
30.5%
$1,555
12.3%
San Jose, California
$1,526,889
1.8%
-2.1%
22
25.2%
$3,456
10.6%
Austin, TX
$558,516
7.4%
-1.4%
37
38.9%
$1,961
10.8%
Virginia Beach, Virginia
$331,650
11.6%
0.0%
21
20.8%
$1,662
7.2%
Nashville, TN
$455,735
24.1%
-1.0%
15
37.5%
$1,927
13.4%
Providence, RI
$450,619
9.8%
-0.5%
13
21.2%
$1,975
11.9%
Milwaukee, Wis.
$270,624
7.2%
-0.3%
26
15.3%
$1,246
7.8%
Jacksonville, Florida
$379,070
25.4%
0.0%
18
37.3%
$1,824
12.1%
Memphis, TN
$235,102
17.4%
-0.2%
19
22.4%
$1,563
10.5%
Oklahoma City, OK
$220,247
14.9%
0.1%
8
28.5%
$1,374
8.3%
Louisville, Kentucky
$243,051
10.9%
0.2%
seven
29.7%
$1,335
12.8%
Hartford, Connecticut
$324,379
10.7%
0.0%
ten
19.7%
$1,738
9.6%
Richmond, Virginia
$338,835
12.8%
0.0%
seven
23.2%
$1,669
11.9%
New Orleans, LA
$272,218
10.9%
-0.1%
17
31.5%
$1,548
13.2%
Buffalo, NY
$247,057
9.0%
-1.0%
12
20.5%
$1,292
10.0%
Raleigh, North Carolina
$451,607
20.3%
-1.1%
12
35.8%
$1,837
12.6%
Birmingham, AL
$249,543
14.1%
0.9%
ten
25.9%
$1,388
9.2%
Salt Lake City, UT
$580,717
7.9%
-2.6%
17
43.2%
$1,758
13.7%

*Table classified by market size

1 The Zillow Real Estate Market Report is a monthly snapshot of national and local real estate markets. Reports are compiled by Zillow Research. For more information, visit www.zillow.com/research.

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