After more than a year of record-breaking home value appreciation, the market is finally showing signs of recovery as inventory continues to build. Inventory grew 3.9% from April to May, according to Zillow's latest Market Report, after a year of steady decline. Out of the top 50 U.S. Markets, only 6 saw inventory fall since April.
Zillow economist, Treh Manhertz, said, “Despite an extremely strong demand for homes in this red-hot market, a steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers. Builders are rushing to churn out new homes, while widespread vaccinations and improved confidence in the economy should help current owners feel more comfortable listing their homes for sale."
Overall, inventory across the U.S. is down 31.2% since May 2020, but this is an improvement from April’s 32.8% decline. New inventory has been trending up since mid-March of 2021.
Still, the amount of time before a newly listed home goes under contract dropped to just 6 days nationwide, and is trending downwards. In hot Midwest metros of Cincinnati, Kansas City, and Columbus, time on the market is as short as 3 days.
In May, annual home appreciation reached a record-breaking 13.2% and monthly growth of 1.7%. Month-over-month growth continues to accelerate in 47 of the 50 U.S. states, with a deceleration in just 3 states. The average home value is now $287,148.
Rents also grew significantly with an increase in monthly growth, from 1.2% in April to 2.3% in May. The average rent for May was $1,747, up 5.4% or $89 over last year. The inland West is the most affected by rent appreciation. The top 8 metros for annual rent growth are Boise, Phoenix, Spokane, Las Vegas, Riverside, Stockton, Fresno, and Albuquerque -- all with increases higher than 15%.
Zillow economists predict prices to continue rising into next year, with a 14.9% increase in home value by May 2022. Sales are forecasted to reach $5.91 million in 2021, which is a 4.8% increase over 2020.
More information on the latest inventory trends and home value trends can be read on Zillow’s latest Markets Report.
