Housing inventory plunges to record lows

Homebuyers face another tough shopping season as Zillow revealed his latest monthly report showing record inventories and unprecedented price growth. The Zillow Home Value Index (ZHVI) rose 1.5% from December to January to $325,677, up 19.9% ​​from a year ago. The annual growth rate represents an all-time high in the past 20 years, and the monthly pace has continued to accelerate after hitting a low of 1.2% in November.

It is expected that if monthly price growth continues at the January rate, annual growth in 2022 would be around 19%. Home values ​​have increased by 30.9% since January 2020, totaling nearly $77,000.

“Homebuyers today are making offers and closing deals despite some of the toughest conditions ever: record numbers of homes for sale to choose from, prices at double-digit gains over the last year, financed at sharply rising mortgage rates,” said Jeff Tucker. , senior economist at Zillow. “It remains to be seen how long buyers can weather this storm and how long homeowners will see values ​​rise before they decide to list. Neither have blinked yet. yourselves to another sizzling hot spring shopping season.”

Growing market heat is affecting consumers nationwide, while monthly home value growth accelerated from December to January in 38 of the nation’s 50 largest metropolitan areas. Of these, the fastest monthly growth was recorded in Nashville, San Diego and Las Vegas, all at 2.5%. The slowest growth was recorded in Milwaukee, New York and Washington, DC, all at 0.7%.

Inventory plunged to record lows as listings fell below 900,000. Home hunters hoping for a range of options and relief from increased competition after December’s inventory drought saw the steepest decline in at least three years. Active inventories fell 13%, the second straight double-digit monthly decline. Although inventory declines seasonally in winter, active inventory is now 22% lower than a year ago and 42.4% lower than January 2020. A strong constraint on news market listings was the main driver, with rates down 19% from December. . January’s flow of new listings was lower than any month since at least the start of 2019.

“If supply chains can unravel, builders should be able to finish and sell more homes this year than they did last,” Tucker said.

Existing home sales in January are expected to be slightly lower than December and January 2021. At a seasonally adjusted annual rate, sales start the year around the level of 2021, which was the best year for existing sales since 2006 Sales of new homes paused after rising late last year as builders scrambled to top up the backlog they had reserved in 2020 when they sold the more new houses in 14 years.

Monthly rent growth also slowed dramatically, from 0.9% in November and December to an almost flat rate of 0.1% in January, the lowest rate seen since October 2020. Rent growth in year-on-year was 15.9%, slightly below a record high. 16% in December, for an average rent of $1,856 per month.

To read the full report, including charts and methodology, Click here.