A strong and widespread recovery of rents has pushed prices beyond where they would have been had the coronavirus pandemic never occurred, according to Zillow’s® latest market report1. Although U.S. home appreciation again broke records in July, there are signs of a rebalancing in the for-sale market to come, with inventory rising for the third consecutive month and home value appreciation slowing in nearly half the major markets.
Rent growth continued to build on momentum that began in March, following a period of sluggishness that started with the COVID-19 outbreak in 2020. Nationally, typical monthly rents rose to $1,843 in July, surpassing June’s record appreciation and rising 9.2%, or $156, above July 2020.
“With the economy continuing to reopen, employees receiving more long-term guidance on remote work, and as students find their way back to college campuses, the rental market is picking back up,” said Nicole Bachaud, Zillow economic data analyst. “As high demand puts pressure on rents and incomes are unable to keep up, affordability will become more of a challenge in the coming months.”
Zillow estimates rents are now $52 higher than they would have been if the past 18 months had been more normal. Rents first surpassed their pre-pandemic trajectory last month.
Rents in nine major metropolitan areas, all across the Sun Belt, are at least 10% higher than would have been expected based on pre-pandemic trends, topping out at 15.6% higher in Tampa. Rents in just nine metros are lower than projected, and nearly all are expensive coastal markets: Los Angeles; Washington, D.C.; Chicago; Minneapolis; Seattle; Boston; New York; San Francisco; and San Jose.
The top 14 metros for annual rent growth are scattered across the Sun Belt, led by Phoenix, up 23.1%, Las Vegas (22.7%), Tampa (21.4%) and Riverside (19.9%). July rents are also positive year over year in all major metros, with holdouts New York, San Francisco and San Josefinally posting yearly growth.
Available for-sale inventory took another encouraging step forward in July, rising 4.5% over June to mark the third consecutive month of rising supply. The improvement is widespread; inventory rose month over month in all but three of the 50 largest U.S. metros. Some of the largest additions of supply came to in-demand metros — Cleveland, Buffalo, Columbus, Denver and Austin. While housing supply is still nearly 28% below July 2020 levels, further injections will help reduce competition and slow extreme price growth.
Home value growth again broke monthly and annual records, with year-over-year appreciation of 16.7% and monthly gains of 2%. This brings typical home values measured by Zillow’s Home Value Index (ZHVI) to $298,933, up nearly $43,000 over last July. Austinagain tops the charts with year-over-year growth landing at 41.5%, significantly higher than New Orleans’ 11.6% year-over-year growth at the bottom of the pack.
The end of rampant price hikes may be on the horizon, however, as 22 of the nation’s 50 largest metros had slower monthly growth than in June. The share of listings with a price cut rose 1.7% in July to 10.4%, and median time on market rose or stayed steady in all but three major metros.
“All signs point to the likelihood that the housing market is beginning to ease off the gas pedal,” said Bachaud.
|
Metropolitan |
Zillow Home (ZHVI) |
ZHVI – |
Zillow (ZORI) |
ZORI – |
ZORI – |
Inventory – |
|
United States |
$298,933 |
16.7% |
$1,843 |
9.2% |
1.9% |
4.5% |
|
New York, NY |
$552,607 |
13.3% |
$2,671 |
1.7% |
2.3% |
2.4% |
|
Los Angeles–Long Beach–Anaheim, CA |
$831,593 |
19.3% |
$2,553 |
6.9% |
1.7% |
2.8% |
|
Chicago, IL |
$280,130 |
13.4% |
$1,746 |
3.5% |
1.0% |
5.4% |
|
Dallas–Fort Worth, TX |
$313,393 |
19.4% |
$1,642 |
12.4% |
2.4% |
4.5% |
|
Philadelphia, PA |
$302,822 |
16.9% |
$1,710 |
6.1% |
1.0% |
4.8% |
|
Houston, TX |
$258,174 |
15.0% |
$1,504 |
8.8% |
1.9% |
3.3% |
|
Washington, D.C. |
$512,936 |
14.2% |
$2,107 |
3.8% |
1.6% |
5.3% |
|
Miami–Fort Lauderdale, FL |
$355,793 |
14.7% |
$2,249 |
17.1% |
3.2% |
-4.0% |
|
Atlanta, GA |
$301,104 |
19.6% |
$1,787 |
17.6% |
2.9% |
2.5% |
|
Boston, MA |
$592,940 |
16.7% |
$2,557 |
2.7% |
1.1% |
-0.3% |
|
San Francisco, CA |
$1,324,433 |
17.8% |
$3,082 |
0.9% |
1.6% |
3.4% |
|
Detroit, MI |
$220,309 |
17.8% |
$1,387 |
10.5% |
1.5% |
10.2% |
|
Riverside, CA |
$495,619 |
25.1% |
$2,358 |
19.9% |
2.5% |
6.0% |
|
Phoenix, AZ |
$390,733 |
29.8% |
$1,746 |
23.1% |
3.2% |
1.6% |
|
Seattle, WA |
$670,473 |
22.7% |
$2,125 |
6.2% |
2.4% |
4.6% |
|
Minneapolis–St. Paul, MN |
$347,512 |
14.0% |
$1,605 |
4.1% |
0.6% |
6.3% |
|
San Diego, CA |
$792,531 |
26.0% |
$2,577 |
11.9% |
2.3% |
5.7% |
|
St. Louis, MO |
$216,727 |
15.9% |
$1,224 |
8.1% |
1.4% |
4.9% |
|
Tampa, FL |
$295,532 |
23.7% |
$1,819 |
21.4% |
3.8% |
2.4% |
|
Baltimore, MD |
$345,194 |
13.8% |
$1,749 |
9.9% |
1.8% |
6.0% |
|
Denver, CO |
$554,544 |
20.4% |
$1,872 |
10.2% |
2.2% |
8.1% |
|
Pittsburgh, PA |
$196,897 |
19.1% |
$1,247 |
4.8% |
0.1% |
7.1% |
|
Portland, OR |
$515,049 |
19.1% |
$1,753 |
8.9% |
1.7% |
6.5% |
|
Charlotte, NC |
$303,816 |
20.5% |
$1,628 |
13.6% |
2.1% |
4.9% |
|
Sacramento, CA |
$540,438 |
23.6% |
$2,142 |
14.2% |
2.6% |
|
|
San Antonio, TX |
$250,108 |
17.0% |
$1,344 |
11.0% |
2.7% |
1.6% |
|
Orlando, FL |
$307,048 |
14.2% |
$1,758 |
14.2% |
3.0% |
1.9% |
|
Cincinnati, OH |
$228,977 |
16.5% |
$1,339 |
9.0% |
1.1% |
7.7% |
|
Cleveland, OH |
$195,514 |
18.2% |
$1,278 |
8.8% |
1.3% |
11.1% |
|
Kansas City, MO |
$250,881 |
18.0% |
$1,304 |
8.2% |
1.0% |
7.2% |
|
Las Vegas, NV |
$360,345 |
21.5% |
$1,662 |
22.7% |
3.6% |
5.6% |
|
Columbus, OH |
$258,420 |
16.1% |
$1,366 |
8.8% |
1.9% |
9.6% |
|
Indianapolis, IN |
$226,634 |
16.9% |
$1,375 |
11.5% |
1.4% |
5.9% |
|
San Jose, CA |
$1,462,949 |
19.6% |
$3,068 |
0.6% |
1.6% |
0.2% |
|
Austin, TX |
$496,659 |
41.5% |
$1,695 |
16.8% |
4.1% |
7.3% |
|
Virginia Beach, VA |
$285,199 |
13.0% |
$1,496 |
13.5% |
2.3% |
3.4% |
|
Nashville, TN |
$347,050 |
16.3% |
$1,724 |
11.3% |
2.4% |
|
|
Providence, RI |
$396,502 |
20.2% |
$1,735 |
13.1% |
1.5% |
7.0% |
|
Milwaukee, WI |
$247,952 |
17.2% |
$1,206 |
5.6% |
0.4% |
15.7% |
|
Jacksonville, FL |
$287,139 |
19.5% |
$1,597 |
18.5% |
3.4% |
2.7% |
|
Memphis, TN |
$192,043 |
16.6% |
$1,504 |
15.1% |
0.9% |
6.8% |
|
Oklahoma City, OK |
$185,328 |
12.2% |
$1,210 |
10.4% |
1.4% |
8.4% |
|
Louisville–Jefferson County, KY |
$214,379 |
13.8% |
$1,169 |
6.4% |
1.5% |
8.1% |
|
Hartford, CT |
$288,772 |
17.6% |
$1,587 |
9.8% |
1.0% |
4.2% |
|
Richmond, VA |
$289,731 |
12.9% |
$1,429 |
10.8% |
1.6% |
4.3% |
|
New Orleans, LA |
$239,869 |
11.6% |
$1,316 |
7.3% |
1.9% |
5.1% |
|
Buffalo, NY |
$221,880 |
23.7% |
$1,225 |
9.2% |
1.7% |
10.2% |
|
Raleigh, NC |
$353,248 |
20.3% |
$1,600 |
14.0% |
3.0% |
-2.9% |
|
Birmingham, AL |
$204,114 |
14.0% |
$1,271 |
9.0% |
2.1% |
1.2% |
|
Salt Lake City, UT |
$510,010 |
26.3% |
$1,547 |
13.5% |
1.0% |
4.6% |
|
*Table ordered by market size |
1 The Zillow Real Estate Market Reports are monthly overviews 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 the Zillow Real Estate Market Reports is 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 is 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 levels can be accessed at www.zillow.com/research/data.