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The COVID-19 pandemic has made little impact on home prices according to a report from Zillow. While sale price growth slowed, Zillow expects it to reaccelerate in the near future, a great sign for sellers but not for buyers.
According to Zillow, the median price of U.S. homes sold in May was $263,408: up 4.6% year-over-year. It was the second consecutive month that the annual growth rate slowed from the previous month. Zillow attributes the slowdown to the change in types of homes on the market. New listings for the most expensive homes showed the steepest drop in April. Meanwhile, affordable listings were less affected. However, change is on the horizon as recent data shows sale price growth is likely.
New listings of high-end homes surged, causing list prices to rise 4.3% annually, as of early July and marking a 5.8% increase in just the past two months. Unfortunately for buyers, inventory has been a constant struggle giving sellers the ability hold firm on asking prices.
"As surprising as it might have seemed at the time, sellers who forged ahead with listing their homes this spring were richly rewarded, when buyers buoyed by record-low mortgage rates flooded their listings with offers," said Jeff Tucker, Zillow economist. "Now, word is getting out that the housing market is on solid ground, so more listings are belatedly rushing to market, extending the busy spring shopping season well into summer. The huge millennial first-time home-buying wave is still cresting, pushing demand above what's still very limited supply, so sellers are likely to find eager buyers for months or even years to come."
Read more from the Zillow report.