Homeowners who are staying put are building huge equity positions. Buyers who want to move have the odds stacked against them. Zillow analysis shows 19 percent decline in listings from December to January. Lowest level in three years.
Home prices are blasting through the roof across America - but inventory of houses on the market is so low it's becoming far more difficult for prospective buyers to make a deal.
Data compiled in January by Zillow shows home values are up more than 30 percent since January 2020 - just weeks before the COVID-19 pandemic settled across the nation. The Zillow Home Value Index (ZHVI) rose 1.5 percent from December to January to $325,677 - an increase of 19.9 percent from the same period in 2021.
But it's the dramatic fall-off in available homes that is especially troubling for homebuyers - many of whom are likely part of a migration trend empowered by remote work freedom and other factors.
January produced the biggest decline in home inventory in at least three years, Zillow reported. From December to January inventory dropped 13 percent, while declining 22 percent year over year. Since January 2020 available homes on the U.S. market have fallen off by 42.4 percent.
"Home buyers today are making bids and closing deals despite some of the most challenging conditions ever: record-few homes for sale to choose from, priced at double-digit gains from last year, financed at sharply rising mortgage rates," said Jeff Tucker, senior economist at Zillow, in a press release on the Zillow Home Value Index findings. "It remains to be seen how long buyers can weather this storm, and how long homeowners will watch values rise before deciding to list. Neither have blinked yet. Expect another sizzling hot spring shopping season."
It remains to be seen how long buyers can weather this storm, and how long homeowners will watch values rise before deciding to list. Neither have blinked yet. Expect another sizzling hot spring shopping season. - Jeff Tucker, Senior Economist for Zillow.
The Zillow analysis found the fastest growth in home values was in Nashville, San Diego and Las Vegas. The slowest growth was in Milwaukee, New York and Washington, D.C., Zillow said.
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