Housing Market Shows Signs of Slowing

TGR Staff – 09/08/2021

According to the latest Zillow® market report, monthly rises in home prices and rents slowed in August. This means that this fall will bring cooler weather and a cooler housing market. In August, higher inventories and more sales ads caused prices to fall, giving buyers more choice and room to make purchase decisions.

Household value has been accelerating every month since January, but eventually fell from 1.97% growth in July to 1.75% growth in August. This is good news for buyers looking for signs of security, but according to Zillow, it has the third-highest monthly growth rate.

The slowdown in-home price growth is widespread, with 43 of the 50 metropolitan areas experiencing a slowdown in August compared to 20 in July. The biggest dips were in Buffalo, San Diego, San Francisco, and Austin. Housing inventories continued to increase for the fourth straight month, rising 4.1% compared to July, and the annual deficit decreased from -33% year-on-year in April to 22.7%. Advertising for sale increased in most of the Midwest of the month. Austin and Washington, DC, on the other hand, have more inventories than they did a year ago.

The number of listings with price cuts has increased for the fourth straight month, further demonstrating that the market is back in equilibrium. The number of property cuts increased by 1.9 points in August, with 12.3% of all US properties experiencing price cuts before the offer was accepted. The total market share in August 2019 was 17.4%.

Home sales have been increasing every month since March, and monthly sales in July have continued to increase slightly, 3.9% compared to August last year. Looking to the future, recent strong sales activity means that Zillow economists expect sales of 5.93 million in 2021, up 5.1% from the historically strong 2020.

In the rental market, monthly rent growth has accelerated since January, but eventually receded in August, slowing from a record high of 2% in July to 1.7%. Nonetheless, August’s 11.5% annual valuation is the highest Zillow record since 2015. A typical US rent measured by the ZillowObservedIncomeIndex (ZORI) is $ 1,874, nearly $ 200 higher than last year.

In Sunbelt, especially Las Vegas (24.9%), Phoenix (24.8%), Tampa (24.7%) and Riverside (20.6%), rents are higher than last year. Rents fell monthly in Kansas City and Richmond and were stable in Cincinnati.