Zillow’s January Real Estate Market Report reveals that even though the annual U.S. home value growth did slow for the 21st month in a row, the change was minuscule. With this data, as well as the fact that housing inventory is at record-low prices, experts predict—and hope— that this almost two-year slow down is about to stop.
U.S. home values grew 3.8% year-over-year to reach $245,193—experiencing a slower rate that is not even a mere one-hundredth of a percent lower than the month prior. As for annual home value appreciation, it experienced a consistent slow down each month since April 2018. However, January’s data revealed the smallest dip between months within this entire time period.
Although the number of homes listed for sale rose from its previous record lows in December, January’s inventory itself fell 8% annually, which marks the largest dip since March 2018. Specifically, January’s market saw 1,500,262 homes listed, a stat that was up from December’s 4,295 homes on the market, but down from the 130,310 stat for houses listed year-over-year.
With such low inventory remaining static, and consistently so, experts point to this being a key indicator to point to an anticipated speed up once again. With the economy holding steady, mortgage rates remain low, setting buyers in the position to vie for a limited number of homes this home shopping season.
Zillow economist Jeff Tucker commented on what to expect as we head into the home shopping season: “As the economic storm clouds on the horizon in early 2019 cleared up, we saw buyers return in droves, taking advantage of ultra-low mortgage rates. Our first look at 2020 data suggests that we could see the most competitive home shopping season in years, as buyers are already competing over near-record-low numbers of homes for sale. That is likely to mean more multiple-offer situations, and that buyers will have a harder time finding the perfect fit for their families. The good news for buyers is that low mortgage rates are helping to make homeownership more affordable, and home builders are responding to the hot housing market by starting construction on more homes than at any time since 2007."