Home Values Start to Slip As Summer Heat Fades from Housing Market (September 2023 Market Report)
Typical home values fell slightly in September, while inventory kept climbing
Home values slipped 0.2% in December, a repeat of November’s modest decline, leaving the typical home value at $356,819, or 0.7% below the peak set in June, according to the Zillow Home Value Index.
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.
Lack of affordability drives further price declines as rebalancing continues
Buyers Gaining Time and Options as Housing Market Rebalances (July Market Report)
Competition is easing as inventory accumulates, leading the market back toward ‘normal’
Monthly payments on a typical mortgage are more than 75% higher than they were in June 2019. Affordability challenges are tamping down competition in formerly red-hot markets, causing steep drops in pending sales in places like San Jose, Seattle, and Salt Lake.
Housing Affordability Hits 15-Year Low as Prices, Mortgage Rates Rise (May 2022 Market Report)
Mortgage payments are higher than rent in 45 of the 50 largest U.S. metros, up from 22 in 2019.
