Home Price Declines Resumed in November As Buyers Await Better Deals (November 2022 Market Report)
Home values slipped 0.2% in November, resuming a slow decline that began this summer.
Market Reports
Rents Slide by Largest Amount in at Least 7 Years (November 2022 Rental Report)
Asking rents declined 0.4% from October to November, the largest one-month decline in the seven-year history of the Zillow Observed Rent Index. November is usually the slowest month for rent increases, but outright declines had not exceeded 0.1% in this time of the year before the pandemic.
The typical U.S. home value fell slightly from October to November (-0.2%), as high interest rates further discouraged home buyers.
Home values inched up 0.1% in October, as tight inventory kept pricing surprisingly resilient. Still, this flicker of demand strength might be a belated response to the late-summer drop in mortgage rates, to an average of 5.22% in August on a 30-year fixed loan, which gave some buyers a reason to jump off the fence and buy then.
The typical U.S. home value was nearly flat from September to October (+0.1%), as buyers and sellers potentially settled on a new market equilibrium.
Home values flatlined in September, ending a 2-month slide in which they fell 0.4% from a peak of $359,719 in June. The reprieve in home price declines may be thanks to a late-summer drop in mortgage rates, to an average of 5.22% in August on a 30-year fixed loan, which gave some buyers a reason to jump off the fence and buy then. Due to the elapsed time of multiple weeks between home purchase offers being made and the transactions closing, August’s more favorable lending conditions likely affected closed sale prices in September. Unfortunately for buyers, rates have risen dramatically since August, and reached a new 20-year high of 6.92% in mid-October, promising a further market cooldown ahead.
Zillow Home Value and Sales Forecast: October 2022
Zillow expects home value growth to continue to slow over the coming months. The national Zillow Home Value Index, which increased by 12.9% in the twelve months ending in September, is expected to grow by just 1.3% in the next twelve months, according to Zillow’s monthly home value forecast. This long-term outlook is in line with last month’s projections, which called for a 1.2% annual increase.
The typical U.S. home value was unchanged in September from August, likely reflecting a response to a late-summer drop in mortgage rates. Rates have since surged higher, which will likely dampen demand this fall and place more downward pressure on prices.
Buyers: Results from the Zillow Consumer Housing Trends Report 2022
A global pandemic, historic economic change and an unprecedented shift in the housing market have been hallmarks of the past year. But while these large-scale changes have shifted the landscape and have the potential to reshape buyers’ preferences over the longer term, many behaviors and attitudes remain the same.
Zillow Home Value and Sales Forecast: September 2022
Zillow expects home value growth to slow considerably over the next year, from the current rate of 14.1% annual growth to 1.4% growth over the coming year. This is a downward revision from August’s year-ahead forecast of 2.4% home value growth.
