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.
Market Reports
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.
Lack of affordability drives further price declines as rebalancing continues
Zillow Home Value and Sales Forecast: August 2022
Zillow’s outlook for home prices has been revised down significantly due to a sharp downturn in July. Zillow forecasts 2.4% home value growth through the end of July 2023.
Buyers Gaining Time and Options as Housing Market Rebalances (July Market Report)
Competition is easing as inventory accumulates, leading the market back toward ‘normal’
