Tag - Zillow

For Least Valuable U.S. Homes, Housing Crisis Recovery Lagging

For Least Valuable U.S. Homes, Housing Crisis Recovery Lagging

SEATTLE/Sept. 21, 2017 (StlRealEstate.News) — Median home values are reaching new peaks in more than half of the nation’s largest housing markets, but a closer look at which homes are regaining value reveals an uneven recovery in the biggest markets.

 More than 50 percent of U.S. homes have reached or surpassed the value they reached during the housing boom period, according to the August Zillow® Real Estate Market Reporti, but the types of homes that are recovering are not the same, particularly in the most populated places. In 24 of the nation’s largest 35 markets, the homes in the bottom third of the market are least likely to have recovered the value lost when the housing bubble burst.

Detroit has seen one of the least balanced recoveries following the Great Recession. Nearly two-thirds of the most expensive homes in Detroit have regained the value lost when the market collapsed. The typical top-tier home value in Detroit is $284,800, higher than it was during the housing bubble. In comparison, homes in the bottom third have only regained 33.7 percent of their lost value, and are now worth a median of $53,000. Only 10.6 percent of these homes have fully returned to their peak values.

As homes are often the most expensive asset someone owns, the recovery contributes to the growing wealth gap across the country. Household incomes show a similar pattern of inequality, according to newly released Census dataii. The median household income across the United States increased in 2016, but those in the top 20 percent of earners took home more than half of the overall income.

“The housing market as a whole is moving at a steady clip, with high demand and low inventory combining to maintain strong home value appreciation,” said Zillow Chief Economist Dr. Svenja Gudell. “Most new construction has been at the higher end of the market, so demand for the limited supply of entry-level homes is pushing up their values, but these homes also lost more value when the bubble burst. Many of these homeowners are still waiting to see their homes come back to where they were about 10 years ago. Even as headline numbers show an overall recovery, there are still thousands of Americans struggling to bounce back from the housing bust.”

The median home value in the U.S. rose 6.9 percent over the last year to a Zillow Home Value Indexiii of $201,900. Seattle is the only major U.S. market where home values rose at a double-digit annual pace, up 12.4 percent since last August to a median home value of $453,100. Tampa home values rose 9.3 percent, and the median home is worth $187,400.

Annual rent appreciation grew for the fourth consecutive month, with rents increasing 1.9 percent from last August to a Zillow Rent Indexiv of $1,430.

Limited inventory leaves few options for buyers. Nationally there were 12.6 percent fewer homes available in August 2017 than there were in August 2016. San Jose and San Diego saw the biggest annual declines in inventory, down 59.4 percent and 37.2 percent respectively.

Mortgage ratesv on Zillow ended August at 3.62 percent, near the lowest level of the month. Rates moved steadily lower throughout the month after starting at a high of 3.72 percentvi. 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.

Zillow
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

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/local-info/ and www.zillow.com/research/data.
ii https://www.census.gov/library/publications/2017/demo/p60-259.html
iii The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
iv The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.
v Mortgage rates for a 30-year fixed mortgage
vi Monthly high occurred on August 1st

SOURCE: Zillow

Renter Demand for Houses Puts Upward Pressure on Prices

Renter Demand for Houses Puts Upward Pressure on Prices

SEATTLE/ Sept. 12, 2017 (StlRealEstate.News) — Rental houses have been in high demand since the housing market crashed, but a lack of supply has made renting those homes more expensive. According to a new Zillow® analysis, the median monthly rent for single-family homes is rising faster than the median monthly rent for apartments.

While rents for both houses and apartments have slowed significantly over the past year, median rent for houses rose 1.3 percent annually to a monthly rent payment of $1,404, but median rent for apartments rose 0.5 percent, to a monthly rent payment of $1,551.

 There are fewer single-family homes to rent than a decade ago. When the housing market crashed, investors scooped up many single-family homes lost to foreclosure and turned them into rentals. Almost 20 percent of all single-family homes across the U.S. were rented in 2016, up from 13.5 percent 10 years prior.

Meanwhile, rentals are in increasingly high demand because many aspiring homeowners don’t have enough money to buy a home. A 20 percent down payment on a typical U.S. home costs more than two-thirds of the median household income, but can cost up to 180 percent of the median household income in pricier housing markets like San Jose and Los Angeles.

According to the 2017 Zillow Group Consumer Housing Trends Reporti (ZGR) coming out this fall, 45 percent of all recent renters consider renting a single-family home, but just 28 percent actually ended up renting one. The report also found that half of all buyers with children at home consider renting instead of buying during their home search, and according to the Census Bureau, 40 percent of families with children still living at home are rentersii.

In half of the 50 largest U.S. metros, median rent for houses is rising faster than median rent for apartments. The most extreme example of this trend is in Portland, Ore., New Orleans and Chicago.  In Portland, monthly rent for houses is rising at almost 4.5 percent annually, but monthly rent for apartments is falling. Over the past year, median rent for Portland apartments fell just over 1 percent, to a monthly payment of $1,536. Median rent for Chicago apartments is also falling, while rent for houses is rising just over 1 percent annually.

“When the market crashed, many families lost homes they owned during the foreclosure crisis, and now may not be able to afford to buy another as home prices rise,” said Zillow Chief Economist Dr. Svenja Gudell. “Those who want to buy are finding it difficult to find the right one, or may need a bit more time to come up with a down payment, but still want the advantage of space that single-family residences often provide. This, coupled with the foreclosure crisis turning millions of homeowners into renters, is a big reason why demand for single-family rental homes has risen over the last few years. Even though rental homes are in high demand, apartment living remains an attractive option for many young renters who want to be close to work and amenities, like restaurants and grocery stores.”

Generation X rentersiii (ages 38-52) are significantly more likely to rent a single-family home than any other home type. Just over 40 percent of Generation X renters rent a single-family home, compared to 25 percent of millennials (ages 18-37) and just 10 percent of Silent Generation renters (ages 73 and over)iv.

Single-family rental homes are a popular choice among Generation X, but millennial and Silent Generation renters are more apt to rent an apartment. Over 50 percent of millennials and 62 percent of Silent Generation rentersv surveyed in Zillow’s 2017 Consumer Housing Trends Report currently rent an apartment.

About Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow and Zestimate are registered trademarks of Zillow, Inc.

The 2017 Zillow Group Report on Consumer Housing Trends is the largest-ever survey of U.S. home buyers, sellers, owners and renters. The full 2017 Zillow Group Report – which examines the characteristics, aspirations and priorities of more than 13,000 U.S. residents aged 18 to 75 about their homes – will be released this fall.
ii According to the U.S. Census Bureau, American Community Survey, 2015.
iii Renters who moved into their home in the past year.
iv According to the 2017 Zillow Group Consumer Housing Trends Report coming out this fall.
v Renters who moved into their home in the past year.
vi The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.
vii National number is from 2016. The latest data available at the metro level is from 2015.

SOURCE: Zillow

Zillow Group Acquires New Home Feed

Zillow Group Acquires New Home Feed

SEATTLE/ Sept. 8, 2017 (StlRealEstate.News) — Zillow Group, Inc. (NASDAQ: Z and ZG), which houses a portfolio of the largest and most vibrant real estate and home-related brands on mobile and the web, today announced it has acquired New Home Feed, a streamlined listing management technology that allows builders to input, manage and syndicate their listings across the web.

“As the leader in new construction data management and a tool many of our builder customers currently use, New Home Feed felt like a natural extension of our current services,” said Tony Small, group vice president of emerging marketplaces at Zillow Group. “By incorporating New Home Feed’s tool set into our offering, it will be easier for partners to send their listings to Zillow Group and will improve the quality and accuracy of our new construction listings. This acquisition is another step toward our ultimate goal for new construction at Zillow Group, which is to help builders market their homes to consumers with a great return-on-investment.”

“We are excited to be joining Zillow Group,” said Rick Phillips, general manager of New Home Feed. “Many of our customers already use Zillow and Trulia to market their new construction homes. New Home Feed allows them to easily input, manage, and syndicate listings, and view intuitive reports in one dashboard. We are thrilled to start working with the Zillow Group team to integrate our technology directly with the platform to meet the rapidly growing needs of the new home industry.”

Zillow Group will discuss the acquisition further at the Zillow Group New Construction Forum, September 14, 2017, in Austin, Texas.

About Zillow Group
Zillow Group (NASDAQ: Z) (NASDAQ: ZG) houses a portfolio of the largest real estate and home-related brands on mobile and the web. The company’s brands focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with unparalleled data, inspiration and knowledge around homes, and connecting them with the right local professionals to help. The Zillow Group portfolio of consumer brands includes real estate and rental marketplaces Zillow®, Trulia®, StreetEasy®, HotPads®, Naked Apartments® and RealEstate.com. In addition, Zillow Group develops a comprehensive suite of marketing software and technology solutions to help real estate, rental and mortgage professionals maximize business opportunities and connect with millions of consumers. The company operates a number of business brands for real estate, rental and mortgage professionals, including Mortech®, dotloop® and Bridge Interactive™. The company is headquartered in Seattle.

SOURCE: Zillow Group

West Coast Home Sellers Cashing In the Most on Record Home Values

West Coast Home Sellers Cashing In the Most on Record Home Values

SEATTLE/Sept. 6, 2017 (StlRealEstate.News) — Holding onto your home for a long period of time over the last decade meant a serious return on investment, especially in some of the nation’s hottest housing markets. According to a new Zillow® analysisi, Oakland, Calif. and Portland, Ore. top the list of cities where home sellers saw the greatest return.

 In Oakland, the typical seller in 2016 sold their home for an average of $590,000 after living in it for just over seven years, which is 78 percent more than what they initially paid. In Portland, the typical 2016 seller sold for about $145,000 more than what they paid nine years earlier, a 65 percent gain.

Nationally, it’s financially advantageous to buy a home rather than rent if you plan on living in it for at least two years and one month, but staying much longer than that has really paid off. U.S. homeowners who lived in their home for about 7 ½ years gained almost $40,000 on the sale of their home — 24 percent more than what they initially paid.

The housing market recovery has sent home values roaring higher in the past several years, especially in West Coast cities that are attracting people with well-paying jobs. Despite the opportunity to cash in on record-high home values, some homeowners choose not to sell because they don’t want to become buyers in a competitive market.

Low inventory and strong demand are driving up home values in these popular markets, making it difficult for aspiring buyers to find a home, but providing a good opportunity for homeowners looking to sell.

“The housing market can change a lot in 10 years, and you see that reflected in this top 10 list,” said Zillow Chief Economist Dr. Svenja Gudell. “Buying a home is one of the biggest financial decisions people will make in their lifetime, and it really paid off for sellers in these cities. Every city on this list has been growing extremely fast over the past decade, with the majority passing peak home value hit during the housing bubble. It’s extremely difficult to time the market, but if you’re a longtime homeowner in one of these cities, you could potentially see a great return on your investment.”

Among Zillow’s top 10 list, three cities have home values growing in the double-digits. In Seattle, home values rose 15.5 percent year-over year, the fastest growing among the list, followed by Boston and Sacramento, Calif.

Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i Zillow analyzed the 50 largest U.S. cities looking for places where home sellers saw the greatest return on their investment. In order to be included in Zillow’s analysis, data needs to be available on at least 60 percent of home sale transactions. If 40 percent of transaction data is missing, the city was not included in the analysis. Among the 50 largest U.S. cities, 17 cities did not meet this threshold and were not included. As a result, 33 of the largest 50 U.S. cities were ranked.
ii The difference between purchase price and sale price without adjusting for carrying costs and transaction costs.
iii The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.

SOURCE: Zillow

Pace of US home sales in July reached lowest level of 2017

Pace of US home sales in July reached lowest level of 2017

WASHINGTON/August 24, 2017 (AP)(StlRealEstate.News) — Americans retreated from buying homes in July as sales sank to their lowest level of the year.

The National Association of Realtors said Thursday that sales of existing homes fell 1.3 percent to a seasonally adjusted annual rate of 5.44 million. Despite the second straight monthly drop, sales are 2.1 percent higher than a year ago. But purchases are starting to slow as fewer properties are coming onto the market.

The real estate market is grappling with the consequences of a persistent shortage of homes for sale despite strong demand from would-be buyers. The decline in listings has driven up prices and made many homes unaffordable: Prices are rising faster than the wages of potential buyers despite a solid job market.

“For more than two years now, inventory has been has been contracting, pushing the housing market into an inventory crisis,” said Svenja Gudell, chief economist at the real estate firm Zillow.

The number of existing homes listed for sale has plunged 9 percent over the past 12 months to 1.92 million. In the meantime, the median sales price has risen 6.2 percent to $258,300 — more than double the pace of growth in average hourly earnings.

The lack of homes on the market is also causing properties to sell more quickly. The average number of days on the market was 30 in July, compared with 36 a year ago.

In July, sales plummeted 14.5 percent in the Northeast and fell 5.3 percent in the Midwest. But buying picked up 2.2 percent in the South and 5 percent in the West.

Homeowners are increasingly staying put rather than moving. The average tenure of someone selling their home in July was 8.28 years, according to ATTOM Data Solutions. The real estate data company says that average period of ownership was the highest ever recorded for figures dating to 2000.

California and New England are where homeowners have remained the longest before selling. The average tenure was more than 10 years in Boston, Los Angeles, San Francisco, Seattle and Providence, Rhode Island. Many of these markets are pricy or have experienced major jumps in home values in recent years.

Daren Blomquist, senior vice president at ATTOM Data Solutions, said there are two major reasons for people staying in homes longer:

First, they’re choosing to build up their equity by staying in place and repaying their mortgages, reflecting a lesson learned during the 2007 housing bust when people without sufficient equity lost their homes to foreclosure.

By JOSH BOAK ,  AP Economics Writer

 

Home Values Higher than Ever in Almost Half of Nation’s Largest Markets

Home Values Higher than Ever in Almost Half of Nation's Largest Markets

SEATTLE/August 24, 2017 (PRN)(StlRealEstate.News)–The median U.S. home is $4,100 more valuable now than at the housing bubble’s peak a decade ago, according to the July Zillow Real Estate Market Reports

– Almost half of the largest U.S. housing markets have surpassed peak home values hit during peak bubble years about a decade ago.

– More than 48 percent of individual homes nationwide are currently worth more than they were prior to the onset of the Great Recession.

– National home values rose 6.8 percent over the past year, to a Zillow Home Value Index (ZHVI) of $200,700. Home values in Seattle, Dallas and Tampa, Fla. rose the most.

– Rents across the country are up 1.6 percent year-over-year, to a Zillow Rent Index (ZRI) of $1,427 per month, with rent in Seattle and Sacramento, Calif. appreciating the most.

Home values are setting new records in about half of the country’s largest metros, and the national median home value is now $4,100 more than it was in April 2007, just before the market crashed, according to the July Zillow® Real Estate Market Reporti.

Home values in Denver, Dallas and San Jose have appreciated most beyond the previous record-highs set at the peak of the housing bubble in the mid-2000s. Homes in Denver are almost 60 percent more valuable now than during the bubble, increasing from a median home value of $235,900 in April 2006 to a current median home value of $371,100.

When the housing market crashed, home values plummeted and it has taken about 10 years for home values to reach new record highs. Strong labor markets and steady income growth have pushed up home values in the nation’s hottest markets more quickly than in others. Among the 35 largest housing markets, 15ii have higher median home values than ever before.

An abundance of well-paying jobs in Portland, San Francisco and Seattle has quickly driven up home values as job seekers flood these markets looking for new opportunities. In Portland, the median home value is about 26 percent higher now than during peak bubble years, and about 20 percent higher in San Francisco and Seattle.

Additionally, more than 48 percent of individual homes nationwide are currently worth more than they were prior to the onset of the Great Recession. In Denver, 99.5 percent of homes are worth more now than during the peak of the housing bubble, but in Las Vegas, less than 1 percent of homes are more valuable.

Home values are high, but affordability – while suffering a bit lately – is still okay, largely because of very low mortgage interest rates helping to keep monthly mortgage payments in check,” said Zillow Chief Economist Dr. Svenja Gudell. “The more pressing issue is abnormally low inventory, which is translating into an extremely competitive environment for home shoppers. Bidding wars and homes selling for over asking price have been common themes in many markets this summer, and continued competition in the face of limited supply will only continue to push home values up going forward. Home shoppers that were hoping to buy this summer but haven’t yet found their dream home may have better luck once September and October roll around, when we can expect to see more homes coming online and less competition.”

The median home value across the U.S. rose 6.8 percent over the past year, to a Zillow Home Value Indexiii of $200,700, which is $4,100 more than in April 2007 when home values were at their previous peak.

Seattle, Dallas and Tampa, Fla. reported the greatest year-over-year home value appreciation between July 2016 and July 2017 among the 35 largest U.S. metros. In Seattle, home values rose almost 13 percent over the past year to a median home value of $450,900.

Median rent across the nation rose 1.6 percent since last July, the fastest pace of appreciation since December 2016, to a median payment of $1,427 per month. Seattle, Sacramento, Calif. and Los Angeles reported the greatest rent growth over the past year. In Seattle and Sacramento, rents rose about 5 percent since last July. In Los Angeles, rents rose just over 4 percent to a Zillow Rent Indexiv of $2,696.

One of the greatest hurdles for home shoppers this summer has been low inventory. There are 13 percent fewer homes on the market now than a year ago, the greatest drop in inventory since June 2013. In San Jose, there are 51 percent fewer homes for sale now than last July, and 36 percent fewer in San Diego.

Mortgage rates were slightly lower on average in July than in June, making it easier for home shoppers to afford rising prices. Mortgage ratesv on Zillow ended the month of July at 3.74 percent, the lowest month-ending rate since May 2017. Mortgage rates hit a high of 3.84 percent in the first few weeks of the monthvi with the month low at 3.72 percentvii. 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.

About Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

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/local-info/ and www.zillow.com/research/data.
ii This tally includes Pittsburgh, where home values didn’t rise and fall to the same extreme during the bubble and bust as in other markets.
iii The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
iv The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.
v Mortgage rates for a 30-year fixed mortgage.
vi Month high on July 7th and July 10th.
vii Month low occurred on July 21st and July 24th.

SOURCE: Zillow

Number of Homes for Sale Drop at Fastest Pace in Four Years

Number of Homes for Sale Drop at Fastest Pace in Four Years

An increase in the number of single-family home rentals has taken away a chunk of sellable inventory, according to the May Zillow Real Estate Market Reports

SEATTLE/June 22, 2017 (STLRealEstate.News) – The number of for-sale homes hitting the market is dropping at its fastest pace in almost four years, according to the May Zillow® Real Estate Market Reportsi.  The typical home stayed on the market for just 77 days, the fewest days on Zillowii ever reported.

Across the country, home shoppers will have 9 percent fewer homes to choose from than a year ago, which is the greatest drop in inventory since August 2013 when inventory was down more than 10 percent.

Columbus, Ohio, San Jose, Calif. and Minneapolis reported the greatest annual declines in the number of homes for sale, with about 30 percent fewer homes for sale in each market.  In San Diego, there are 26 percent fewer homes on the market than a year ago, and 22 percent fewer in Seattle.  Both San Diego and Seattle have high buyer demand and home value growth of over 6 percent.

When the housing market crashed, many Americans went from owning single-family homes to renting them — between 2005 and 2016, the number of owner-occupied single-family homes fell by 680,000, while the number of renter-occupied single-family homes increased by 6.2 millioniii.

This increase in the number of single-family home rentals is one of the reasons why inventory remains low.  The amount of new construction coming available hasn’t been enough to offset the subtraction of more single-family homes being converted to rentals.  Rental homes are put for sale less frequently, which creates more options for renters, but fewer for buyers.

“Inventory has been falling for years with supply no longer meeting demand, and there are multiple reasons for the worsening situation,” said Zillow Chief Economist Dr. Svenja Gudell.  “On the demand side, simple demographic change is contributing to incredibly high demand as millennials reach their prime home-buying years and begin to enter the market in droves.  This is coupled with relatively low levels of new home construction on the supply side insufficient to keep pace with demand, and what is built is largely priced beyond the reach of many of the first-time and entry-level home buyers in the market.  Thousands of single-family homes that were once bought and sold every few years prior to the recession have now been converted into rental properties by investors, trading hands much less frequently and further contributing to inventory shortages.  And finally, in some still hard-hit markets, negative equity is likely keeping many homeowners of lower-end homes from listing their home for sale because they can’t afford to profitably do so.  There is no silver bullet that will clear the market of all of these issues, and buyers frustrated by the status quo will likely have to remain patient and be ready to pounce once that perfect home does become available.”

The median home value across the country is $199,200, up 7.4 percent since this time last year.  Seattle, Dallas and Tampa, Fla. reported the highest year-over-year home value appreciation among the 35 largest U.S. metros.  In Seattle, home values rose almost 13 percent to a median value of $440,100. Home values in Dallas and Tampa are up about 11 percent since this time last year.

Median rent across the nation rose 0.7 percent since last May, to a median payment of $1,416 per month.  Seattle, Sacramento, Calif. and Los Angeles reported the greatest year-over-year rent appreciation among the 35 largest U.S. metros.  Rents in Seattle are up almost 6 percent to a Zillow Rent Indexiv (ZRI) of $2,127.  Median rent in Sacramento is up 4.5 percent, while Los Angeles median rent are up 4 percent.

Mortgage ratesv on Zillow ended the month of May at 3.73 percent, the lowest level of the month.  Mortgage rates hit a high of 3.90 percent less than two weeks into Mayvi.  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.

See the FULL REPORT for information about the St. Louis as well as other cities across the nation.

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help.  In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell.  Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research.  Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years.  Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

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Zillow is a registered trademark of Zillow, Inc.

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Source: News provided by Zillow, Inc. – distributed via PR Newswire

Mortgage Payments are Unaffordable in Half of America’s Largest Markets

The new normal: staying put - STLRealEstate.News

SEATTLE/June 9, 2017 (STLRealEstate.News) – Buying the typical home listed for sale in more than half of the nation’s 35 largest markets will require a greater share of income than the median-valued home required historically, according to a new Zillow® analysisi.

One reason this home shopping season is so difficult for buyers is that the homes available for sale are generally more expensive than the median home value of all homes in the same market.

As home prices recovered and surpassed the peak values reached during the housing bubble, concerns about housing affordability also returned, despite low mortgage rates keeping monthly payments relatively affordable.  The large down payments that come with high prices are a significant barrier to home-ownership, and the monthly payments are taking up a larger share of income as well.

Nationally, mortgage payments on the median home for sale require 20 percent of the median income.

“Homes have gotten so expensive in many major cities that even with low mortgage rates, monthly costs for homes that are currently for sale are starting to be unaffordable,” said Zillow Chief Economist Dr. Svenja Gudell.  “Down payments are a top concern for today’s home-buyers, but the reality is that monthly costs are becoming unaffordable as well.  Low inventory is pushing sticker prices higher, and when mortgage rates start to rise, monthly payments will be driven further into unaffordable territory.”

Los Angeles home-buyers have to spend the highest share of income on mortgage payments – the typical home for sale would require 46.8 percent of the median income.  In the years leading up to the housing bubble, Los Angeles home-buyers would have had to spend 35.2 percent of their income on mortgage payments for the typical home.

Cleveland homes for sale are more affordable than homes were historically.  The median list price of about $144,000 would require 12.7 percent of the median income for monthly mortgage payments.  In pre-bubble years, paying the mortgage on the typical Cleveland home required 20 percent of the median income.

Homes for sale in the six largest California metros have unaffordable mortgage payments

– The median price of homes for sale is higher than the median home value of all homes in all but three of the largest 35 U.S. metros.

– Monthly mortgage payments on for-sale homes in Los Angeles require 46.8 percent of the median income.

– Monthly payments for the median-valued U.S. home require 16 percent of the median income.

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help.  In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell.  Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research.  Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years.  Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

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