The latest market report from Zillow reports that competition for the few available homes in the US has made this home buying season prices rise significantly.
“The value of typical US homes grew a 1.4% between April and May, the highest monthly appreciation since last June. That’s a few degrees colder than the previous two springs, but hotter than 2018 or 2019. Typical home value is $346,856, up 0.9% from last May and 3.4% from a recent low in January,” the report says.
Buyers are motivated despite few options and rising mortgage rates, as confirmed by the sales up nearly 10% from April to May from Zillow.
“Many homeowners still choose not to sell and forgo historically low mortgage rates. But those that do have been rewarded with bidding wars as buyers compete for limited options,” said Jeff Tucker, a senior economist at Zillow. “Spring is traditionally the hottest time of the year in the housing market, and 2023 has been no exception. Time will tell if the seasonal price slowdowns arrive in time this year, later in the summer.”
According to the report, a new home loan with typical US value would include monthly mortgage payments just under $1,800: “That monthly payment is 22% higher than last year.double that of May 2019, and the second highest on record after October 2022.”
The lack of new listings, coupled with determined demand from buyers, has pushed prices up and lower total inventory to record lows for this time of year. The number of homes for sale on Zillow in May was 3.1% lower than last year and a whopping 46% below May 2019.
The report shows that buyers are still motivated, despite difficult conditions: “Sales measured by pending new listings increased 9.5% from April, paring the year-on-year decline to 18% in May and marking a steady improvement from March. While this seems low compared to the pandemic era, the sales figures are close to pre-pandemic standards.”
For more details about the report, go here.
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