The answer to the housing market’s dilemma of tight inventory may have been found, according to Zillow's latest Monthly Market Report, as more and more are listing their homes and taking advantage of record-high home prices.
There were slightly less than one million homes listed for sale in the U.S. in March (966,970), down 1.1% from February 2021’s totals and down 32% from March 2020, marking the 18th consecutive month of overall annual declines, and the 12th consecutive month of double-digit annual declines.
Although continued demand for homes pushed total for-sale inventory down 1.1% in March, the monthly decline was the smallest seen since July 2020, thanks to a rush of new inventory (rising 30% from late February to late March).
Redfin recently reported the median home-sale price increasing 18% year-over-year to $344,625, an all-time high in March 2021, with asking prices also reaching an all-time high of $356,175.
"March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand," said Zillow Economist Treh Manhertz. "With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months. That will come as welcome news to home shoppers who are seeing bidding wars and homes plucked from the market weeks faster than usual."
Zillow economists forecast 6.4 million homes to sell in 2021—up 13.5% from 2020 and the strongest year for sales since 2006—and expect home values to rise 10.4% over the next year.
The fastest monthly home value growth was seen in Austin, Texas with a 2.4% growth; Phoenix with a 2.3% rise; and Riverside, California with a 1.9% rate of growth, all accelerating from the previous month. Growth was slowest in San Jose at 0.05% growth; San Francisco at 0.6%; and Orlando at 0.7%. Annual appreciation as of March ranged from a high of 20.2% in Phoenix, to a lows of 5.4% in San Francisco.
Mortgage rates listed by third-party lenders on Zillow started March at 2.88%, reached a monthly low of 2.85% on the third and the 25th of the month, bounced off a high of 3.03% on March 17th and 19th, and ended at an average of 2.89%.
Home value appreciation rose a record 1.2% month-over-month to $276,717, marking the largest monthly rise in Zillow records going back to 1996, and a jump in value of $3,200 from February to March for the typical home. Annual appreciation rose to 10.6%, the largest jump in 15 years.
Click here to read more about Zillow’s March 2021 Monthly Market Report.