U.S. Rents Accelerate While Home Values Return to Modest Growth
After flatlining in the spring, quarterly home value growth has returned to a steady pace
- The median home in the U.S. is worth $229,600, up 4.9% from a year ago. Quarterly growth reached an annualized rate of 3.4% - up from 0.4% in May - suggesting the market has shifted back to a sustainable pace of growth.
- Rent growth continued to accelerate, up 2% year-over-year to $1,595.
- For-sale inventory - which has been persistently low for the past few years - fell 3.9% from a year ago, the biggest drop in 16 months.
Sep 19, 2019, 08:00 ET
SEATTLE, Sept. 19, 2019 /PRNewswire/ -- Home value growth returned to a steady pace in August after a slowdown in the first half of the year, according to the August Zillow® Real Estate Market Reporti. Quarter-over-quarter growth reached an annualized rate of 3.4%, up from 0.4% in May.
The median U.S. home is now worth $229,600, up 4.9% from last August, the lowest year-over-year change since April 2015. Annual growth has steadily slowed for eight consecutive months covering a period of significant change for the U.S. housing market. The rate of quarterly growth, a better indicator for recent market shifts and inflection points, has risen in each of the past three months.
Each of the 35 largest metros is appreciating at a slower annual rate than a year ago, but quarterly growth has accelerated since May in 26 of these. Of these large markets, only San Jose (down 10.8% annually) and San Francisco (down 1.9%) saw year-over-year declines, while home values in Las Vegas, Chicago, Portland, Seattle, Sacramento, Boston, Baltimore, New York, Los Angeles, Washington, D.C., and San Diego fell quarter-over-quarter.
The fastest-growing large markets were Indianapolis (up 7.9% year-over-year), Charlotte (up 7.1%) and Atlanta (up 6.9%). These markets have led the way in each of the past few months. The biggest quarterly gains were in Pittsburgh (up 1.7%), Tampa (up 1.7%) and Cleveland (up 1.2%).
"We have persistently strong consumer confidence and the significant drop in mortgage rates to thank for the housing market's return to modest home value growth," said Zillow Director of Economic Research Skylar Olsen. "While it may be a good time to lock in your 30-year fixed rate, the market is still starved for inventory and it's getting harder again for buyers to find the right home. If current market conditions hold, it wouldn't be a surprise to see home values continue to rise, but we could see a shift if consumer sentiment dips. Similarly, rental markets continue to feel the pressure of under building in the past – a reality not overcome by the surge in large, pricier apartment buildings in downtown areas. Most of these buildings continue to readily lease up, and rent growth is expected to continue."
Rents continued to pick up the pace in August, marking the second consecutive month that rent growth has accelerated. The typical rent in the U.S. is $1,595, up 2% from a year ago.
Rents are growing faster than a year ago in 29 of the 35 largest markets. Both Las Vegas and Phoenix grew 6% annually, the largest yearly growth for any market since October 2016. Only one market fell year-over-year – Portland, which saw negative growth for the fifth month in a row.
Inventory fell 3.9%, the biggest annual drop in 16 months. There are 61,792 fewer homes on the market than this time last year. New listings grew on an annual basis for the second consecutive month, up 2.1% year-over-year.
The for-sale market has experienced persistently low inventory over the past few years, due in part to a shortage of new construction. A majority of experts surveyed by Zillow expect that shortage to last until 2022 or later.
Mortgage rates listed on Zillow fluctuated in August, ending the month at 3.7%, up four basis points from August 1. Rates peaked at 3.8% on August 8. 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.
Metropolitan Area |
Zillow Home |
ZHVI Year- |
ZHVI Quarter |
Zillow Rent |
ZRI Year- |
Inventory |
United States |
$229,600 |
4.9% |
3.4% |
$1,595 |
2.0% |
-3.9% |
New York, NY |
$443,800 |
3.2% |
-0.1% |
$2,284 |
1.1% |
-1.8% |
Los Angeles-Long Beach-Anaheim, CA |
$653,000 |
1.0% |
-0.2% |
$2,605 |
0.4% |
-1.3% |
Chicago, IL |
$225,500 |
2.0% |
-1.4% |
$1,617 |
2.6% |
1.4% |
Dallas-Fort Worth, TX |
$243,900 |
4.8% |
1.5% |
$1,442 |
1.7% |
3.6% |
Philadelphia, PA |
$233,800 |
2.1% |
1.6% |
$1,499 |
3.1% |
-9.6% |
Houston, TX |
$206,900 |
3.2% |
2.8% |
$1,379 |
0.1% |
0.4% |
Washington, DC |
$408,500 |
2.0% |
-0.2% |
$1,977 |
2.7% |
-16.2% |
Miami-Fort Lauderdale, FL |
$285,900 |
3.2% |
2.1% |
$1,852 |
2.8% |
-1.6% |
Atlanta, GA |
$222,100 |
6.9% |
3.7% |
$1,456 |
4.7% |
2.0% |
Boston, MA |
$463,900 |
1.6% |
-0.7% |
$2,419 |
3.3% |
-3.0% |
San Francisco, CA |
$934,700 |
-1.9% |
-3.7% |
$3,169 |
1.7% |
3.7% |
Detroit, MI |
$162,800 |
4.0% |
0.7% |
$1,215 |
2.5% |
9.4% |
Riverside, CA |
$372,200 |
2.8% |
0.8% |
$1,910 |
3.5% |
-8.4% |
Phoenix, AZ |
$269,700 |
4.8% |
3.3% |
$1,407 |
6.0% |
-11.5% |
Seattle, WA |
$491,700 |
1.1% |
-1.0% |
$2,038 |
2.5% |
-7.8% |
Minneapolis-St Paul, MN |
$271,800 |
3.9% |
0.0% |
$1,497 |
1.4% |
-4.7% |
San Diego, CA |
$592,300 |
0.7% |
-0.5% |
$2,522 |
3.3% |
-7.0% |
St. Louis, MO |
$168,200 |
3.5% |
2.9% |
$1,010 |
1.5% |
-17.9% |
Tampa, FL |
$217,900 |
5.2% |
6.9% |
$1,393 |
3.4% |
-5.6% |
Baltimore, MD |
$267,400 |
0.6% |
-0.7% |
$1,607 |
0.2% |
-9.8% |
Denver, CO |
$411,200 |
3.4% |
1.1% |
$1,782 |
1.8% |
7.9% |
Pittsburgh, PA |
$145,900 |
2.9% |
7.2% |
$1,101 |
1.7% |
-19.2% |
Portland, OR |
$396,300 |
1.2% |
-1.7% |
$1,652 |
-0.3% |
-7.3% |
Charlotte, NC |
$211,700 |
7.1% |
3.7% |
$1,325 |
4.2% |
-3.9% |
Sacramento, CA |
$411,900 |
2.5% |
-1.1% |
$1,794 |
4.1% |
-10.2% |
San Antonio, TX |
$196,400 |
5.0% |
4.0% |
$1,216 |
0.8% |
8.8% |
Orlando, FL |
$241,300 |
5.1% |
2.4% |
$1,418 |
3.7% |
-7.0% |
Cincinnati, OH |
$171,000 |
5.1% |
1.7% |
$1,150 |
3.7% |
-16.1% |
Cleveland, OH |
$147,900 |
4.2% |
5.0% |
$1,069 |
4.6% |
-5.9% |
Kansas City, MO |
$192,600 |
4.3% |
1.0% |
$1,121 |
1.5% |
N/A |
Las Vegas, NV |
$278,600 |
3.4% |
-3.2% |
$1,333 |
6.0% |
34.9% |
Columbus, OH |
$195,400 |
6.9% |
4.6% |
$1,184 |
1.1% |
-12.4% |
Indianapolis, IN |
$168,400 |
7.9% |
4.1% |
$1,096 |
1.5% |
N/A |
San Jose, CA |
$1,139,600 |
-10.8% |
-8.7% |
$3,329 |
0.1% |
10.2% |
Austin, TX |
$313,500 |
4.7% |
3.4% |
$1,590 |
2.7% |
-11.3% |
About Zillow
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i 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.
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