Some sellers shake free from 'rate lock,'
helping to cut inventory deficit
- Monthly mortgage payments on a home purchase fell about 1.5%
from October to November.
- Rate lock may be easing as a two-year new-listings shortfall
shrank to 14.1% below "normal."
- Typical home values fell 0.4% month over month, slightly faster
than typical for this time of year.
SEATTLE, Dec. 11,
2023 /PRNewswire/ -- Mortgage rates falling from a
23-year high have brought some early holiday cheer for home
shoppers and sellers. The latest Zillow®1 market report
shows monthly costs for a new mortgage are falling, inventory is
trending back toward normal, and price cuts are
uncharacteristically common.
"Despite high-cost headwinds, buyers have a few things to be
thankful for in today's market," said Zillow Chief Economist
Skylar Olsen. "Home prices are
cooling down faster than normal as new listings from existing
owners and total inventory slowly recover. Mortgage rates are still
above 7%, but price cuts are surprisingly common, and mortgage
costs eased a bit. These factors favor buyers who are reluctant to
pause their home search in the off-season."
Mortgage costs tick down, along with rates, home
values
Buyers facing extreme cost challenges received a bit
of relief as monthly mortgage costs on a typical home purchase fell
1.5% from October to November. That's down from a peak in October,
when costs were up 9% annually and almost 120% above pre-pandemic
levels. Affordability improved, too, with mortgage
payments2, as a share of household income, falling from
October's record high of 40.4% to 38.6% in November.
The monthly decline in costs was primarily driven by falling
mortgage rates. But rates still higher than 7% also helped push
down home values. The Zillow Home Value Index declined 0.4% from
October to November, falling slightly faster than what was
previously considered "normal" for this time of year. Still, the
typical national home value is up 2.8% from last year and now
stands at $347,415.
Annual growth is strongest in Hartford (11.3%), Milwaukee (8.5%) and San Diego (7.6%) — places where demand has
overwhelmed supply. The largest annual drops are in New Orleans (-8.9%), Austin (-8.2%) and San Antonio (-3%), with those last two metros
serving as examples of how a surge in new construction is helping
rebalance markets.
Inventory continues to climb out of pandemic hole
Home
shoppers have dealt with a low flow of new listings for nearly two
years, but some sellers are finally returning to the market. New
listings bottomed out at almost 35% below pre-pandemic norms in
April, but positive momentum over the past few months has cut the
shortfall to just 14%. Still, new listings fell 20.5% month over
month — a much smaller drop than normal for November.
Mortgage rates slightly down from an October peak, or an
expectation for relatively high rates for longer, may be shaking
some current owners free from "rate lock." Metros in the Midwest,
the Great Lakes region and the South have the smallest declines in
new listings compared to before the pandemic. Zillow surveys show
70% of sellers are also buying; relative affordability in these
areas offers inbound movers an easier time.
Total inventory continues slowly recovering from its pandemic
deficit, but is still down 37.2%.
Price cuts still abnormally common as sellers respond to high
rates
Sellers are responding to affordability challenges by
cutting list prices. The share of listings that saw a price cut in
November is unseasonably high at 22.6% – even more so than
October's rate of 25%. Agents are updating pricing strategies as
persistently high mortgage rates weigh on buyers. Moving into
winter, there's a good chance buyers will have more wiggle room in
negotiations.
Price cuts are most common in Tampa (33%), Indianapolis (31.7%), Salt Lake City (30.8%) and Nashville (30.5%).
Metropolitan
Area*
|
November
Zillow
Home
Value
Index
(ZHVI)
(Raw)
|
ZHVI
Change,
Year
over
Year
(YoY)
|
ZHVI
Change,
Month
over
Month
(MoM)
|
Median
Days to
Pending
|
Share
of
Listings
with a
Price
Cut
|
New
Inventory
Change
Since
Before
Pandemic
|
Total Inventory
Change, Since
Before Pandemic
|
United
States
|
$347,415
|
2.8 %
|
-0.4 %
|
21
|
22.6 %
|
-14.1 %
|
-37.2 %
|
New York, NY
|
$628,275
|
4.3 %
|
0.0 %
|
30
|
13.1 %
|
-31.3 %
|
-50.6 %
|
Los Angeles,
CA
|
$913,204
|
5.7 %
|
-0.1 %
|
17
|
17.8 %
|
-25.2 %
|
-42.8 %
|
Chicago, IL
|
$304,937
|
5.7 %
|
-0.5 %
|
14
|
24.1 %
|
-6.4 %
|
-50.1 %
|
Dallas, TX
|
$367,164
|
-0.9 %
|
-0.6 %
|
27
|
29.6 %
|
-14.6 %
|
-24.4 %
|
Houston, TX
|
$300,992
|
-0.9 %
|
-0.6 %
|
28
|
24.7 %
|
-10.3 %
|
-21.8 %
|
Washington,
DC
|
$541,631
|
3.4 %
|
-0.3 %
|
14
|
22.7 %
|
-24.0 %
|
-47.6 %
|
Philadelphia,
PA
|
$346,868
|
6.5 %
|
-0.1 %
|
14
|
23.8 %
|
-16.2 %
|
-47.7 %
|
Miami, FL
|
$476,703
|
6.5 %
|
0.3 %
|
29
|
21.7 %
|
-10.6 %
|
-32.0 %
|
Atlanta, GA
|
$373,212
|
2.6 %
|
-0.3 %
|
26
|
25.7 %
|
-19.4 %
|
-30.3 %
|
Boston, MA
|
$657,809
|
7.2 %
|
-0.3 %
|
11
|
19.9 %
|
-13.5 %
|
-46.6 %
|
Phoenix, AZ
|
$450,220
|
-0.3 %
|
-0.1 %
|
29
|
29.8 %
|
-20.8 %
|
-27.3 %
|
San Francisco,
CA
|
$1,109,956
|
0.2 %
|
-0.8 %
|
19
|
18.8 %
|
-23.0 %
|
-19.4 %
|
Riverside,
CA
|
$559,309
|
2.9 %
|
-0.1 %
|
23
|
21.0 %
|
-31.5 %
|
-42.3 %
|
Detroit, MI
|
$239,827
|
5.0 %
|
-0.6 %
|
14
|
23.6 %
|
-9.6 %
|
-38.4 %
|
Seattle, WA
|
$702,728
|
1.2 %
|
-0.5 %
|
18
|
25.4 %
|
-30.6 %
|
-38.0 %
|
Minneapolis,
MN
|
$363,728
|
1.1 %
|
-1.0 %
|
30
|
26.2 %
|
-20.0 %
|
-37.6 %
|
San Diego,
CA
|
$900,176
|
7.6 %
|
-0.2 %
|
15
|
21.8 %
|
-28.8 %
|
-51.5 %
|
Tampa, FL
|
$375,338
|
1.2 %
|
-0.2 %
|
24
|
33.0 %
|
-11.9 %
|
-15.9 %
|
Denver, CO
|
$568,411
|
0.0 %
|
-0.8 %
|
26
|
27.8 %
|
-30.8 %
|
-21.2 %
|
Baltimore,
MD
|
$370,782
|
4.1 %
|
-0.5 %
|
13
|
25.3 %
|
-13.3 %
|
-51.7 %
|
St. Louis,
MO
|
$240,221
|
5.3 %
|
-0.6 %
|
11
|
25.4 %
|
-5.8 %
|
-48.5 %
|
Orlando, FL
|
$388,048
|
2.3 %
|
-0.2 %
|
23
|
27.0 %
|
-9.9 %
|
-15.8 %
|
Charlotte,
NC
|
$371,844
|
2.1 %
|
-0.2 %
|
16
|
22.5 %
|
-12.4 %
|
-17.7 %
|
San Antonio,
TX
|
$283,571
|
-3.0 %
|
-1.0 %
|
40
|
27.7 %
|
-3.3 %
|
3.8 %
|
Portland, OR
|
$532,762
|
0.3 %
|
-0.8 %
|
27
|
25.0 %
|
-23.1 %
|
-28.5 %
|
Sacramento,
CA
|
$561,146
|
-0.1 %
|
-0.5 %
|
17
|
23.4 %
|
-28.3 %
|
-44.0 %
|
Pittsburgh,
PA
|
$204,254
|
3.7 %
|
-0.8 %
|
16
|
26.0 %
|
-3.8 %
|
-41.7 %
|
Cincinnati,
OH
|
$270,826
|
5.2 %
|
-0.5 %
|
11
|
26.4 %
|
-12.0 %
|
-40.2 %
|
Austin, TX
|
$453,715
|
-8.2 %
|
-1.3 %
|
59
|
25.7 %
|
-13.6 %
|
22.8 %
|
Las Vegas,
NV
|
$408,621
|
-0.4 %
|
0.1 %
|
23
|
23.0 %
|
-32.5 %
|
-39.8 %
|
Kansas City,
MO
|
$289,476
|
4.9 %
|
-0.8 %
|
12
|
28.0 %
|
-19.0 %
|
-46.4 %
|
Columbus, OH
|
$301,138
|
5.0 %
|
-0.4 %
|
11
|
29.4 %
|
-17.4 %
|
-36.8 %
|
Indianapolis,
IN
|
$268,125
|
2.0 %
|
-0.6 %
|
19
|
31.7 %
|
-6.9 %
|
-24.6 %
|
Cleveland,
OH
|
$215,597
|
5.8 %
|
-0.5 %
|
12
|
24.6 %
|
-7.9 %
|
-52.2 %
|
San Jose, CA
|
$1,481,470
|
6.3 %
|
-0.1 %
|
14
|
14.9 %
|
-9.9 %
|
-35.8 %
|
Nashville,
TN
|
$429,859
|
-0.3 %
|
-0.4 %
|
27
|
30.5 %
|
-19.9 %
|
-28.0 %
|
Virginia Beach,
VA
|
$334,990
|
5.8 %
|
-0.2 %
|
28
|
23.7 %
|
-13.5 %
|
-52.3 %
|
Providence,
RI
|
$455,609
|
7.4 %
|
-0.2 %
|
14
|
21.1 %
|
-23.9 %
|
-63.6 %
|
Jacksonville,
FL
|
$352,463
|
-1.5 %
|
-0.4 %
|
38
|
29.5 %
|
-12.3 %
|
-20.6 %
|
Milwaukee,
WI
|
$326,703
|
8.5 %
|
-0.7 %
|
30
|
20.5 %
|
15.2 %
|
-25.5 %
|
Oklahoma City,
OK
|
$227,152
|
3.2 %
|
-0.3 %
|
22
|
26.1 %
|
3.5 %
|
-17.4 %
|
Raleigh, NC
|
$431,889
|
0.6 %
|
-0.4 %
|
19
|
27.7 %
|
-26.4 %
|
-33.1 %
|
Memphis, TN
|
$232,510
|
-0.9 %
|
-0.6 %
|
32
|
25.2 %
|
-7.2 %
|
-7.8 %
|
Richmond, VA
|
$350,939
|
4.5 %
|
-0.3 %
|
10
|
23.4 %
|
-6.9 %
|
-49.2 %
|
Louisville,
KY
|
$246,402
|
4.1 %
|
-0.5 %
|
15
|
27.7 %
|
-14.5 %
|
-37.5 %
|
New Orleans,
LA
|
$234,084
|
-8.9 %
|
-1.6 %
|
42
|
21.4 %
|
25.6 %
|
37.7 %
|
Salt Lake City,
UT
|
$528,405
|
0.0 %
|
-0.6 %
|
27
|
30.8 %
|
-38.8 %
|
-22.4 %
|
Hartford, CT
|
$339,593
|
11.3 %
|
-0.2 %
|
8
|
16.5 %
|
-5.0 %
|
-66.8 %
|
Buffalo, NY
|
$248,445
|
5.9 %
|
-0.5 %
|
14
|
18.4 %
|
-7.9 %
|
-44.6 %
|
Birmingham,
AL
|
$248,184
|
0.4 %
|
-0.6 %
|
16
|
21.1 %
|
-5.8 %
|
-26.3 %
|
*Table ordered by market size
1 The Zillow® Real Estate Market Report is a monthly
overview of the national and local real estate markets. The reports
are compiled by Zillow Research. For more information, visit
www.zillow.com/research.
2 Monthly mortgage payment represents the principal and
interest on a new purchase of a home priced at November's Zillow
Home Value Index level of $347,415,
using a 30-year, fixed-rate mortgage.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to
make home a reality for more and more people. As the most visited
real estate website in the United
States, Zillow and its affiliates help people find and get
the home they want by connecting them with digital solutions, great
partners, and easier buying, selling, financing and renting
experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out
East®, StreetEasy®, HotPads®, ShowingTime+℠, and
Spruce®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
(ZFIN)
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SOURCE Zillow