Inventory Rebounds Amid Record Home Value and Rent Growth

Time on market drops to six days across the U.S. in hot home-buying season

- The inventory crunch shows signs of relenting, as available inventory rose 3.9% over April

- Home appreciation breaks new records as typical time on market falls to just 6 days

- Rent growth kicks into high gear with the largest monthly increase since 2015

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Jun 16, 2021, 08:05 ET

SEATTLE, June 16, 2021 /PRNewswire/ -- Continued torrid growth in the housing market paired with a long-awaited bump in inventory in May, according to Zillow's® latest Market Report. Home value appreciation continues to break records and typical time on market is down to just six days. Meanwhile, rents are rising quickly across the U.S., breaking out after growth was stymied under the pandemic.

Inventory is finally showing signs of recovery at the national level after nearly a year of steady decline. The 3.9% month-over-month gain in May is the first uptick since July 2020 and only the fifth seen in the last 24 months. Of the top-50 largest U.S. markets, only six saw inventory fall from April. Inventory across the U.S. is down 31.2% since May 2020, an improvement over the 32.8% annual decline seen in April. New inventory has trended up since mid-March.

"Despite extremely strong demand for homes in this red-hot market, a steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers," said Treh Manhertz, Zillow economist. "Builders are rushing to churn out new homes, while widespread vaccinations and improved confidence in the economy should help current owners feel more comfortable listing their homes for sale."

However, the typical time for a newly listed home to go under contract dropped to just six days nationwide, one day shorter than in April. Time on market is the shortest at three days in hot Midwest metros of Cincinnati, Kansas City and Columbus.

Annual home appreciation reached 13.2% in May while monthly growth was 1.7%, both of which are new records within Zillow data reaching back through 1996. Typical home values now stand at $287,148. Month over month growth accelerated in 47 of the 50 largest U.S. markets and decelerated in just three -- roughly matching the local market heat in April.

Austin retained its lead in annual appreciation with a blistering 30.5% increase over 2020, followed by Phoenix (23.5%) and Salt Lake City (20.6%). Even the metros with the lowest annual appreciation -- Orlando, New Orleans and Oklahoma City -- still put up historically strong numbers above 9%.

Typical rents rose substantially, accelerating from 1.3% monthly growth in April to 2.3% in May -- the largest monthly appreciation since 2015. Rents hit $1,747 in May, up 5.4% or $89 over last year. Rent appreciation is especially strong in the Inland West. Of the 100 largest U.S. metros, the top eight for annual rent growth are Boise, Phoenix, Spokane, Las Vegas, Riverside, Stockton, Fresno, and Albuquerque -- all with increases higher than 15%.

The list of major cities with lower rents than last year shrank again, as Seattle and Chicago clawed into the green. Only the expensive coastal metros of San Francisco, San Jose, New York, Boston, and Washington D.C. remain in the red.

Zillow economists forecast home values to increase by 14.9% by May 2022, an upward revision from the April forecast. Home sales are expected to reach 5.91 million in 2021, a 4.8% increase over 2020.

Mortgage rates listed by third-party lenders on Zillow began May at a monthly high of 2.69%, dropped down to a mere 2.63% on May 7 and 10 -- close to all-time lows -- and ended at a monthly high of 2.84%. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Group Mortgages site by third-party lenders and reflect recent changes in the market.

Metropolitan Area*	Zillow Home Value Index	ZHVI - YoY Change	Zillow Observed Rent Index	ZORI - YoY Change	Inventory - MoM Change	Days on Market
United States	$287,148	13.2%	$1,747	5.4%	3.9%	6
New York, NY	$536,211	10.6%	$2,541	-4.4%	3.8%	26
Los Angeles-Long Beach-Anaheim, CA	$794,575	13.5%	$2,425	3.1%	2.4%	10
Chicago, IL	$271,019	10.7%	$1,758	0.3%	7.5%	6
Dallas-Fort Worth, TX	$297,044	14.4%	$1,551	8.0%	4.7%	13
Philadelphia, PA	$294,147	14.7%	$1,662	5.2%	9.3%	7
Houston, TX	$247,026	10.4%	$1,436	5.0%	0.2%	8
Washington, DC	$504,257	12.8%	$2,008	-0.4%	13.6%	5
Miami-Fort Lauderdale, FL	$344,370	10.7%	$2,086	11.1%	-6.4%	16
Atlanta, GA	$286,047	15.0%	$1,696	13.6%	1.7%	6
Boston, MA	$573,182	13.1%	$2,528	-1.4%	11.2%	7
San Francisco, CA	$1,255,661	11.6%	$2,867	-5.9%	5.9%	9
Detroit, MI	$212,925	12.8%	$1,308	9.3%	8.7%	5
Riverside, CA	$472,569	19.0%	$2,213	17.3%	4.3%	8
Phoenix, AZ	$367,484	23.5%	$1,620	17.7%	1.6%	7
Seattle, WA	$632,585	17.1%	$1,937	0.4%	13.7%	6
Minneapolis-St Paul, MN	$337,255	11.1%	$1,578	2.3%	11.6%	9
San Diego, CA	$754,557	19.6%	$2,420	8.8%	6.5%	7
St. Louis, MO	$209,683	13.4%	$1,207	6.3%	7.1%	5
Tampa, FL	$276,685	17.7%	$1,676	15.0%	-2.0%	5
Baltimore, MD	$336,738	12.1%	$1,695	8.0%	11.7%	5
Denver, CO	$529,969	15.2%	$1,760	6.6%	10.8%	4
Pittsburgh, PA	$190,588	15.0%	$1,258	3.7%	8.9%	5
Portland, OR	$496,162	15.1%	$1,630	6.0%	11.4%	5
Charlotte, NC	$288,116	16.1%	$1,570	10.4%	2.5%	4
Sacramento, CA	$516,489	17.1%	$1,985	12.7%	10.1%	6
San Antonio, TX	$237,979	12.4%	$1,281	7.1%	0.8%	6
Orlando, FL	$290,447	9.3%	$1,667	8.9%	-3.4%	6
Cincinnati, OH	$221,607	14.9%	$1,285	7.5%	7.3%	3
Cleveland, OH	$188,562	15.3%	$1,222	5.7%	8.2%	4
Kansas City, MO	$244,048	15.9%	$1,205	7.1%	11.7%	3
Las Vegas, NV	$339,768	12.7%	$1,527	17.3%	-0.4%	6
Columbus, OH	$250,201	13.6%	$1,332	6.8%	11.3%	3
Indianapolis, IN	$216,944	14.8%	$1,317	10.0%	8.5%	4
San Jose, CA	$1,384,778	11.4%	$2,874	-4.9%	8.0%	11
Austin, TX	$458,885	30.5%	$1,554	9.3%	15.8%	9
Virginia Beach, VA	$278,282	11.1%	$1,431	11.5%	9.4%	14
Nashville, TN	$329,597	12.1%	$1,651	7.0%		4
Providence, RI	$382,289	16.6%	$1,756	12.9%	9.0%	7
Milwaukee, WI	$237,009	14.8%	$1,219	4.3%	22.5%	32
Jacksonville, FL	$271,909	13.7%	$1,486	13.2%	1.3%	5
Memphis, TN	$185,176	14.6%	$1,480	14.5%	9.1%	16
Oklahoma City, OK	$179,507	9.9%	$1,174	6.9%	5.0%	4
Louisville-Jefferson County, KY	$207,950	11.7%	$1,151	5.8%	6.6%	4
Hartford, CT	$279,657	15.3%	$1,502	8.8%	10.6%	5
Richmond, VA	$283,730	11.4%	$1,388	8.4%	10.0%	5
New Orleans, LA	$233,885	9.5%	$1,277	8.8%	1.4%	7
Buffalo, NY			$1,190	8.4%	13.4%	9
Raleigh, NC	$333,255	14.0%	$1,510	10.4%	-1.4%	4
Birmingham, AL	$198,513	11.1%	$1,191	8.0%	-1.9%	4
Salt Lake City, UT	$486,928	20.6%	$1,488	10.9%	13.5%	5

*Table ordered by market size

¹ The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/research/data.

² Zillow Group Marketplace, Inc. is a licensed mortgage broker, NMLS #1303160.

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SOURCE Zillow