Home-value growth is slowing in almost two-thirds of the nation’s largest housing markets, according to the July Zillow® Real Estate Market Report released Thursday.
Seattle, which led the nation in home-value growth a year ago, is now the 12th fastest-appreciating housing market and reported the greatest slowdown over the past year. At this time last year, home values in Seattle were appreciating at more than 14% annually, but have now slowed to a 9% appreciation rate.
Home values across the U.S. rose 8% in the past year, 0.7 percentage points faster than the year before. While national home value growth hasn’t slowed yet, Zillow forecasts the annual appreciation rate to drop to 6.8% over the next 12 months. The median home value in the U.S. is $218,000, the highest value ever reported.
While home-value growth is slowing in the majority of the largest markets, the current annual appreciation rate is still higher than historical norms in all but four of the markets analyzed. In Tampa, where home-value growth has slowed significantly over the past year, home values rose over 10.5% in the past year, while the historic average rate of appreciation is just over 5%. The historic average annual rate of appreciation in the U.S. is 3.7%.
“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” said Zillow senior economist Aaron Terrazas. “But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”
The rental market is also showing signs of a slowdown. Median rent across the U.S. rose 0.5% over the past year to $1,440, down from 1.6% growth a year ago. Among the 35 largest housing markets, 21 reported slower rent appreciation in July compared to a year ago, with Seattle, Portland and Kansas City leading the slowdown.
Rental prices rose the most over the past year in Riverside, Calif., Sacramento and Las Vegas. Median rent in Riverside rose 4.6% since last July to $1,898. Median rent in Sacramento and Las Vegas rose 4.4% and 3.2%, respectively.
The number of homes for sale has been declining annually across the country for 42 straight months, although the pace of the decline is slowing. Home shoppers will have about 4% fewer homes on the market to choose from than a year ago – the smallest annual decline in 17 months. Columbus, Ohio, Atlanta and Pittsburgh reported the greatest drop in inventory over the past year. In Columbus and Atlanta, home shoppers will have about 14% fewer homes to choose from than a year ago, and about 13% fewer to choose from in Pittsburgh.
July ended with mortgage rates on Zillow at 4.40%, after starting the month at 4.35%. July mortgage rates peaked on the second to last day of the month at 4.42%, and hit a month low in the middle of the month when rates were at 4.30%. 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.
Metropolitan Area | Current YoY Home Value Growth | July 2017 YoY Home Value Growth | Average Rate of Home Value Growth | Zillow Home Value Index (ZHVI) | Zillow Rent Index (ZRI) | Current YoY ZRI Change | July 2017 YoY ZRI Change | YoY Inventory Change |
United States | 8.0% | 7.3% | 3.7% | $ 218,000 | $ 1,440 | 0.5% | 1.6% | -3.9% |
New York, NY | 5.9% | 6.8% | 4.8% | $ 429,700 | $ 2,372 | -0.4% | -1.0% | 2.7% |
Los Angeles-Long Beach-Anaheim, CA | 6.2% | 7.3% | 6.9% | $ 643,300 | $ 2,752 | 2.0% | 4.3% | 13.2% |
Chicago, IL | 5.2% | 5.8% | 2.4% | $ 219,800 | $ 1,636 | -0.8% | 0.2% | 1.4% |
Dallas-Fort Worth, TX | 11.6% | 11.9% | 3.1% | $ 231,100 | $ 1,595 | 0.1% | 3.0% | 31.2% |
Philadelphia, PA | 5.5% | 5.9% | 3.6% | $ 228,400 | $ 1,566 | -0.7% | -0.4% | -9.3% |
Houston, TX | 6.0% | 4.9% | 3.0% | $ 199,300 | $ 1,548 | 0.5% | -2.7% | -6.5% |
Washington, DC | 3.4% | 3.4% | 4.8% | $ 397,500 | $ 2,132 | -0.1% | 0.4% | 1.3% |
Miami-Fort Lauderdale, FL | 8.4% | 10.3% | 5.9% | $ 275,700 | $ 1,857 | 0.4% | -1.8% | 2.9% |
Atlanta, GA | 12.2% | 8.1% | 3.2% | $ 206,300 | $ 1,394 | 2.7% | 3.4% | -14.2% |
Boston, MA | 6.9% | 8.2% | 5.3% | $ 456,400 | $ 2,365 | -0.4% | 2.4% | 7.6% |
San Francisco, CA | 10.4% | 6.9% | 7.2% | $ 954,100 | $ 3,399 | 0.4% | -0.6% | 11.7% |
Detroit, MI | 9.9% | 10.0% | 2.6% | $ 156,100 | $ 1,194 | 2.3% | -1.0% | 1.5% |
Riverside, CA | 7.0% | 8.0% | 6.2% | $ 358,600 | $ 1,898 | 4.6% | 4.3% | 15.4% |
Phoenix, AZ | 7.7% | 7.3% | 4.8% | $ 256,000 | $ 1,362 | 1.7% | 2.6% | -8.6% |
Seattle, WA | 9.1% | 14.2% | 5.6% | $ 487,600 | $ 2,173 | 0.3% | 5.3% | 13.2% |
Minneapolis-St Paul, MN | 6.9% | 7.7% | 4.3% | $ 261,300 | $ 1,638 | 1.8% | 3.9% | -1.4% |
San Diego, CA | 6.0% | 8.3% | 6.6% | $ 584,100 | $ 2,540 | 1.0% | 3.5% | 36.3% |
St. Louis, MO | 5.4% | 5.3% | 3.0% | $ 161,800 | $ 1,139 | -0.4% | 0.4% | -5.4% |
Tampa, FL | 10.6% | 14.2% | 5.3% | $ 205,900 | $ 1,390 | 2.3% | 1.8% | 0.2% |
Baltimore, MD | 4.9% | 3.3% | 4.0% | $ 264,700 | $ 1,740 | 0.2% | -0.1% | -0.4% |
Denver, CO | 7.1% | 8.7% | 5.2% | $ 397,800 | $ 2,054 | 1.3% | 0.6% | -8.3% |
Pittsburgh, PA | 7.8% | 4.4% | 4.0% | $ 141,600 | $ 1,083 | -0.4% | -2.3% | -13.1% |
Portland, OR | 5.7% | 9.0% | 2.9% | $ 391,800 | $ 1,834 | -0.7% | 3.8% | 16.7% |
Charlotte, NC | 10.7% | 8.9% | 3.1% | $ 196,800 | $ 1,293 | 1.3% | 2.7% | 6.8% |
Sacramento, CA | 5.7% | 9.1% | 5.7% | $ 400,800 | $ 1,842 | 4.4% | 4.9% | 3.5% |
San Antonio, TX | 5.6% | 8.4% | 3.2% | $ 185,900 | $ 1,332 | -0.4% | 1.3% | 10.4% |
Orlando, FL | 9.8% | 12.6% | 4.8% | $ 228,700 | $ 1,448 | 2.3% | 3.1% | -9.6% |
Cincinnati, OH | 6.7% | 7.2% | 2.5% | $ 162,000 | $ 1,276 | 0.6% | 1.8% | -6.8% |
Cleveland, OH | 6.8% | 6.2% | 1.4% | $ 141,500 | $ 1,140 | -0.3% | -0.3% | -6.9% |
Kansas City, MO | 9.3% | 8.6% | 3.2% | $ 182,600 | $ 1,264 | -1.0% | 2.4% | -3.3% |
Las Vegas, NV | 14.5% | 11.9% | 4.4% | $ 266,200 | $ 1,305 | 3.2% | 1.9% | n/a |
Columbus, OH | 8.6% | 6.8% | 2.8% | $ 182,600 | $ 1,335 | 1.5% | 1.2% | -14.4% |
Indianapolis, IN | 9.4% | 6.2% | 1.3% | $ 154,100 | $ 1,195 | 0.0% | -0.3% | n/a |
San Jose, CA | 26.0% | 8.4% | 7.9% | $ 1,292,600 | $ 3,499 | 0.5% | -0.9% | 46.2% |
Austin, TX | 6.1% | 6.7% | 3.3% | $ 298,000 | $ 1,681 | -1.4% | -1.0% | 1.2% |
