Shifting winds set the stage for unseasonably warm winter housing market

Home values grew a record 19.3% year over year in November, and appreciation accelerated in much of the U.S.

- The typical U.S. home is worth $316,368. That's up 19.3% from a year ago, a new high in Zillow's records.

- For-sale inventory fell for the second month in a row, after promising gains from May to September.

- Rents are growing at their slowest monthly pace since March.

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Dec 17, 2021, 08:00 ET

SEATTLE, Dec. 17, 2021 /PRNewswire/ -- The usual spring thaw in the housing market appears to have come before winter even begins, according to the Zillow® November Market Report.ⁱ Home value growth is trending up in most large markets while inventory is trending down, suggesting a more competitive market is in the cards this winter.

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U.S. home values rose 1.2% from October and are now 19.3% higher than they were a year ago, a record high for any 12-month period this century. While monthly growth slowed nationally, it accelerated in 30 of the 50 largest metro areas. If this trend continues, the market cooling over the past few months may be short-lived, and this could be an unseasonably warm winter housing market.

"Home buyers angling for a bargain this winter are finding the shelves nearly bare, as inventory has shrunk even faster than in a typical November," says Zillow senior economist Jeff Tucker. "Buyers will find some silver linings to this cloudy winter market, like fewer bidding wars and the typical home lingering longer on the market before the seller accepts an offer. But that's small comfort to buyers after a year in which prices have risen by almost 20%."

The fastest monthly home value growth was seen in Nashville (2.6%), Orlando (2.4%) and Atlanta (2.3%); the slowest was in Milwaukee (0.3%), Pittsburgh (0.3%), Detroit (0.5%), Buffalo (0.5%) and Sacramento (0.5%).

A sharp dive in inventory is likely to ramp up competition and possibly push prices up further in coming months. Nationally, the number of for-sale listings is down 6.1% from October and 17.5% from an already low level a year ago. Compared to the pre-pandemic housing market in November 2019, there are 37.8% fewer homes on the market across the U.S. Inventory fell from October in all large metros for which data is available.ⁱⁱ

The inventory dip is especially noteworthy in the context of mortgage forbearance offerings, which have now expired for most borrowers who participated. The end of mortgage forbearance had been expected by some market observers to trigger a wave of forced sales from homeowners unable to make payments once they came due again. Judging by results thus far, the program has achieved its goal of keeping people in their homes.

While home values likely cannot continue to grow at this pace, their climb so far can be explained by market fundamentals that show no sign of reversing any time soon. Demographic realities will likely keep demand high for the foreseeable future, and there is no quick fix for the inventory crunch. Over the next 12 months, Zillow expects home values to rise 14.3%, which would be a significant slowdown from the current pace, but also would have been the highest annual growth in Zillow's records before June. Existing home sales are expected to end 2021 at 6.13 million — 8.6% higher than 2020 — and rise to more than 6.5 million next year.

One small nugget of good news for buyers is that homes lasted one day longer on the market than they did in October, giving buyers a little more time to assess their options. The typical home went pending after 12 days in November compared to 11 the month before.

Rent growth is also slowing as we get deeper into the typically slower winter season. The typical U.S. rent is up 15.2% year over year to $1,867, but monthly growth fell to 0.9%, marking the first month rent has grown less than 1% since March.

Rents are growing fastest in New Orleans (+3.1% month over month), Miami (+2.7%) and Hartford (+1.8%). The typical rent fell from October to November in seven markets, falling most in Buffalo (-1.1%), Minneapolis–St. Paul (-0.4%) and Virginia Beach (-0.3%).

Metropolitan Area*	Zillow Home Value Index (ZHVI)	ZHVI – Year-over-Year Change	ZHVI – Month-over-Month Change	Median Days to Pending	Zillow Observed Rent Index (ZORI)	ZORI – Year-over-Year Change	ZORI – Month-over-Month Change
United States	$316,368	19.3%	1.2%	12	$1,867	15.2%	0.9%
New York, NY	$571,556	13.2%	0.6%	34	$2,735	14.6%	0.9%
Los Angeles–Long Beach-Anaheim, CA	$858,357	17.6%	0.8%	13	$2,735	12.4%	0.9%
Chicago, IL	$287,131	13.6%	0.9%	17	$1,715	9.4%	0.3%
Dallas–Fort Worth, TX	$338,194	24.2%	1.6%	17	$1,712	17.7%	1.0%
Philadelphia, PA	$311,614	15.4%	0.8%	12	$1,730	10.6%	0.8%
Houston, TX	$275,005	18.9%	1.2%	13	$1,522	11.3%	0.3%
Washington, D.C.	$523,083	12.3%	0.6%	10	$2,133	10.9%	0.3%
Miami–Fort Lauderdale, FL	$388,878	21.2%	2.0%	18	$2,520	27.3%	2.7%
Atlanta, GA	$330,218	26.1%	2.3%	9	$1,888	22.7%	0.4%
Boston, MA	$608,370	14.9%	0.7%	9	$2,555	14.1%	1.1%
San Francisco, CA	$1,358,518	17.0%	0.7%	13	$3,054	8.8%	-0.1%
Detroit, MI	$225,601	15.9%	0.5%	11	$1,374	11.6%	0.5%
Riverside, CA	$529,415	26.9%	0.9%	13	$2,467	17.9%	0.2%
Phoenix, AZ	$422,463	32.4%	1.5%	13	$1,878	26.5%	1.2%
Seattle, WA	$706,964	21.7%	1.6%	N/A	$2,184	16.2%	0.2%
Minneapolis–St. Paul, MN	$350,754	12.9%	0.6%	18	$1,619	5.4%	-0.4%
San Diego, CA	$822,714	23.9%	0.9%	11	$2,748	16.6%	1.0%
St. Louis, MO	$222,076	14.2%	0.7%	7	$1,203	10.3%	0.8%
Tampa, FL	$323,040	29.5%	2.1%	6	$1,984	28.4%	1.3%
Baltimore, MD	$351,507	12.3%	0.7%	10	$1,792	12.1%	1.0%
Denver, CO	$577,543	22.1%	1.3%	6	$1,905	14.3%	0.1%
Pittsburgh, PA	$200,382	16.1%	0.3%	17	$1,314	8.5%	0.8%
Portland, OR	$535,415	18.4%	0.9%	7	$1,817	12.5%	0.2%
Charlotte, NC	$329,961	26.1%	2.0%	6	$1,701	18.5%	0.8%
Sacramento, CA	$570,569	22.6%	0.5%	N/A	$2,210	13.8%	0.6%
San Antonio, TX	$269,724	20.8%	1.5%	12	$1,386	14.9%	0.3%
Orlando, FL	$332,633	22.1%	2.4%	8	$1,878	24.0%	1.6%
Cincinnati, OH	$238,813	16.6%	0.8%	5	$1,396	10.2%	0.6%
Cleveland, OH	$199,727	16.2%	0.7%	9	$1,184	10.1%	0.5%
Kansas City, MO	$261,238	18.1%	0.9%	5	$1,257	9.6%	0.8%
Las Vegas, NV	$391,346	26.1%	1.9%	10	$1,815	25.3%	0.4%
Columbus, OH	$269,247	16.7%	1.2%	4	$1,359	10.0%	0.8%
Indianapolis, IN	$239,443	18.7%	1.8%	5	$1,406	13.7%	0.2%
San Jose, CA	$1,506,129	16.6%	1.0%	10	$3,049	8.1%	0.3%
Austin, TX	$534,443	43.7%	1.4%	19	$1,790	24.0%	-0.1%
Virginia Beach, VA	$298,156	14.6%	1.0%	35	$1,547	15.2%	-0.3%
Nashville, TN	$384,321	24.9%	2.6%	7	$1,786	18.8%	0.8%
Providence, RI	$414,993	19.5%	0.9%	12	$1,764	11.9%	0.6%
Milwaukee, WI	$251,388	14.4%	0.3%	35	$1,151	6.9%	-0.1%
Jacksonville, FL	$314,569	26.4%	2.2%	9	$1,716	23.7%	1.2%
Memphis, TN	$205,936	19.0%	1.7%	20	$1,449	14.8%	-0.1%
Oklahoma City, OK	$194,998	14.8%	1.3%	7	$1,223	11.5%	0.4%
Louisville–Jefferson County, KY	$222,357	13.9%	1.0%	7	$1,147	7.9%	1.1%
Hartford, CT	$295,119	15.8%	0.6%	12	$1,563	9.9%	1.8%
Richmond, VA	$301,739	14.5%	0.9%	6	$1,499	14.0%	1.7%
New Orleans, LA	$252,003	14.0%	1.0%	13	$1,373	14.3%	3.1%
Buffalo, NY	$226,248	20.6%	0.5%	11	$1,122	8.9%	-1.1%
Raleigh, NC	$391,444	29.5%	2.0%	5	$1,657	18.1%	0.5%
Birmingham, AL	$215,449	16.1%	1.3%	6	$1,277	11.4%	1.5%
Salt Lake City, UT	$544,529	27.9%	1.0%	7	$1,622	18.5%	0.8%

*Table ordered by market size

About Zillow Group
Zillow Group Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter.

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ⁱ The Zillow Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research. The data in the Zillow Real Estate Market Report are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas, dating back to 2000. Mortgage and home loan data is 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 levels can be accessed at www.zillow.com/research/data.
ⁱⁱ November for-sale inventory data is available for 49 of the 50 largest U.S. metros. Inventory for each of these areas fell from October.

SOURCE Zillow