Homeowners List While Buyers Hang Back, Pushing Inventory Higher

Home value growth eases along with competition – price relief may be on the horizon

  • Homeowners are breaking free from rate lock — new listings rose nearly 13% since last year.
  • Inventory is accumulating, rising 22% over last year and reducing the pandemic-era deficit.
  • Home value appreciation slowed in May, and forecast points to prices easing over the next year.

Seattle, WA – June 12, 2024 (PRNewswire) Home sellers are returning to the market, but they’re finding buyers hesitating, according to the latest Zillow® market report.1 New listings of houses outpaced sales in May, allowing buyer competition and price growth to cool — and further price relief is in the forecast.

“Rate lock’s hold seems to be loosening — homeowners who may have put off listing their homes are done waiting. But just as more choices sprang up for sale, buyers turned on cruise control,” said Orphe Divounguy, Zillow senior economist. “Inflation has hit younger households hardest, and stubbornly high rates have pushed a mortgage out of reach for many first-time buyers. That has cooled competition for houses. If these trends hold, we’re likely to see price growth flatten or tick down over the next year.”

Inventory infusion
New listings from sellers took a larger-than-average step up, rising 8% from April to May, and now stands 13% above last year’s extremely low level. The effects of “rate lock” — when owners hold onto their existing homes and low-rate mortgages — are weakening over time. A Zillow survey of recent sellers found a large majority (about 80%) were influenced by life events, such as getting married or having a child, and not necessarily by optimal financial conditions. 

But buyers aren’t matching sellers’ enthusiasm; sales in May were 6% lower than last year.2 This helped partially restock the housing shelves, with the number of homes on the market rising 22% compared to last year’s near record-low level. Inventory is still 34% below pre-pandemic norms, but that’s the smallest deficit in more than three years. 

New listings rose the most annually on the West Coast and coastal South, in San Diego, Seattle, Charlotte, Raleigh and the San Francisco Bay Area. Compared to last year, total inventory accumulated the most in major Florida markets, where strong new construction has helped refill the coffers. Buyers saw more listings month over month in every major market except Miami. 

Competition and appreciation ease
As a result, competition among buyers eased in May, and home price appreciation cooled with it. Growth in typical home values slowed from 4.4% year over year in April to 3.9% in May — still a healthy, normal rate — while monthly appreciation ticked down from 1.2% in April to 0.8% in May. Home values are still up significantly — more than 45% — since before the pandemic. 

Prices have fallen year over year in New Orleans, Austin and San Antonio, while appreciation is strongest in the Northeast and coastal California.

Renters struggling to save up for a down payment may get a slight reprieve in the coming year. Zillow forecasts home values will end 2024 up 0.4% on the year, and tick down 1.4% through May 2025. 

What it means for buyers and sellers
Zillow’s market heat index shows the nation is becoming a bit friendlier for buyers and is headed toward “neutral” territory, but sellers still hold a slight advantage. Buffalo, Hartford and San Jose are the top markets for sellers among the 50 largest metro areas. New Orleans, Miami, Jacksonville and Memphis are all tilted toward buyers, giving those in the market better leverage in negotiations.  

Nationwide, nearly one-quarter of all homes for sale received a price cut in May, the highest share in the past six years for this time of year. There’s a good chance that buyers can purchase a lingering property for less than list price. This environment makes experienced agents all the more valuable for both buyers and sellers, to find and negotiate deals for buyers, and to price and market properties correctly for sellers.  

Size
rank
Metropolitan
Area
May Zillow Home
Value Index
(ZHVI) (Raw)
ZHVI Change, 
Year over Year
(YoY)
ZHVI Change 
Since Before the
Pandemic
Market
Favors**
Share of
Listings with a
Price Cut
Inventory
Change, YoY
New Listings
Change, YoY
0United States$360,3103.9 %45.3 %Sellers23.9 %22.1 %12.6 %
1New York, NY$658,6037.1 %31.6 %Strong sellers13.8 %-4.6 %7.3 %
2Los Angeles, CA$965,5068.9 %42.8 %Strong sellers18.1 %21.1 %21.3 %
3Chicago, IL$321,7337.0 %35.7 %Strong sellers21.1 %3.0 %6.6 %
4Dallas, TX$379,2521.1 %46.9 %Sellers32.0 %28.9 %12.5 %
5Houston, TX$309,8541.6 %38.6 %Neutral28.3 %25.8 %11.6 %
6Washington, DC$569,6024.7 %30.7 %Strong sellers19.7 %11.3 %16.7 %
7Philadelphia, PA$362,1786.7 %43.8 %Sellers20.6 %5.8 %12.2 %
8Miami, FL$490,5116.6 %62.0 %Buyers24.5 %43.5 %10.8 %
9Atlanta, GA$386,7984.0 %56.3 %Neutral28.0 %37.5 %23.4 %
10Boston, MA$701,7408.3 %42.5 %Strong sellers16.9 %9.7 %15.6 %
11Phoenix, AZ$461,3904.2 %53.0 %Sellers35.2 %13.6 %26.6 %
12San Francisco, CA$1,188,8685.4 %25.5 %Strong sellers18.6 %27.1 %29.0 %
13Riverside, CA$585,9996.5 %52.1 %Sellers22.9 %23.7 %16.7 %
14Detroit, MI$254,0986.3 %40.4 %Sellers18.1 %6.2 %7.8 %
15Seattle, WA$754,3326.4 %44.8 %Strong sellers22.8 %27.1 %31.4 %
16Minneapolis, MN$376,4611.3 %27.4 %Strong sellers21.7 %22.7 %15.4 %
17San Diego, CA$962,78611.1 %56.8 %Sellers22.9 %44.4 %32.5 %
18Tampa, FL$381,4142.8 %61.8 %Buyers36.2 %60.6 %24.7 %
19Denver, CO$593,7321.9 %36.1 %Sellers32.9 %32.2 %24.5 %
20Baltimore, MD$387,4553.8 %31.3 %Sellers21.9 %14.7 %16.3 %
21St. Louis, MO$253,1434.5 %40.2 %Strong sellers19.5 %12.8 %5.8 %
22Orlando, FL$397,8593.3 %54.6 %Neutral30.0 %49.9 %20.7 %
23Charlotte, NC$386,1815.1 %59.1 %Neutral24.9 %27.3 %30.4 %
24San Antonio, TX$288,333-2.2 %34.7 %Neutral32.5 %29.3 %3.9 %
25Portland, OR$554,4651.6 %32.3 %Strong sellers25.8 %23.0 %14.2 %
26Sacramento, CA$586,9974.3 %34.5 %Strong sellers25.0 %19.8 %21.4 %
27Pittsburgh, PA$217,9686.1 %33.3 %Sellers23.1 %5.6 %13.0 %
28Cincinnati, OH$287,7545.2 %47.5 %Strong sellers22.0 %16.1 %12.1 %
29Austin, TX$463,202-4.1 %42.4 %Neutral30.7 %14.7 %14.6 %
30Las Vegas, NV$429,3697.1 %44.4 %Sellers23.3 %3.5 %23.1 %
31Kansas City, MO$306,0023.9 %45.8 %Strong sellers23.3 %27.8 %15.5 %
32Columbus, OH$314,9995.5 %49.7 %Strong sellers24.3 %25.9 %21.8 %
33Indianapolis, IN$281,9913.5 %50.7 %Sellers27.9 %21.2 %12.2 %
34Cleveland, OH$230,9537.5 %46.3 %Strong sellers18.7 %0.4 %7.1 %
35San Jose, CA$1,644,20212.7 %41.7 %Strong sellers14.5 %21.0 %28.5 %
36Nashville, TN$445,5522.1 %48.7 %Neutral32.8 %17.5 %13.5 %
37Virginia Beach, VA$351,4015.5 %41.0 %Sellers19.5 %17.1 %10.1 %
38Providence, RI$483,3138.2 %51.6 %Strong sellers15.4 %9.0 %11.0 %
39Jacksonville, FL$360,5471.4 %52.3 %Buyers32.7 %45.6 %16.2 %
40Milwaukee, WI$348,4356.5 %42.3 %Strong sellers11.4 %12.8 %17.1 %
41Oklahoma City, OK$235,3072.4 %42.9 %Neutral27.2 %23.1 %12.6 %
42Raleigh, NC$448,8583.0 %53.4 %Sellers29.2 %35.3 %29.1 %
43Memphis, TN$242,3001.8 %46.6 %Buyers27.1 %24.2 %5.1 %
44Richmond, VA$372,3535.0 %46.9 %Strong sellers20.7 %15.9 %12.6 %
45Louisville, KY$258,5223.7 %37.0 %Sellers23.9 %27.7 %20.1 %
46New Orleans, LA$241,191-5.9 %5.0 %Buyers27.0 %22.3 %5.8 %
47Salt Lake City, UT$548,5302.7 %46.3 %Sellers30.1 %19.4 %14.2 %
48Hartford, CT$363,76311.6 %56.3 %Strong sellers12.0 %15.9 %16.2 %
49Buffalo, NY$264,1117.5 %51.4 %Strong sellers14.5 %1.8 %2.6 %
50Birmingham, AL$254,4840.0 %37.6 %Sellers24.1 %22.0 %12.0 %
*Table ordered by market size 
**Based on Zillow Market Heat Index
1The 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.
2Tracked by Zillow’s Sales Count NowCast.

About Zillow Group:
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences. 

Zillow Group’s affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

SOURCE Zillow

Zillow Providing Open-source Technology to Promote Fair Housing in AI-powered Real Estate Conversations

Zillow has created the Fair Housing Classifier for large language models (LLMs) to help others in real estate, civil rights and technology sectors safeguard AI-powered real estate conversations

Seattle, WA – May 21, 2024 (PRNewswire) Today, Zillow is releasing its open-source Fair Housing Classifier, which establishes guardrails to promote responsible and unbiased behavior in real estate conversations powered by large language model (LLM) technology.

Many AI tools disregard fair housing requirements and, when deployed, can perpetuate bias and undermine the progress achieved in advocating for fair housing. Zillow’s Fair Housing Classifier focuses on mitigating the risk of illegal steering — the practice of influencing a buyer’s choice of communities based upon the buyer’s legally protected characteristics under federal law.

“Since 2006, Zillow has used AI to bring transparency to home shoppers, powering tools like the Zestimate,” said Josh Weisberg, senior vice president of Artificial Intelligence. “We’ve made it our business to increase transparency in real estate — open sourcing this classifier demonstrates that advancements in technology do not need to come at the expense of equity and fairness for consumers. We’re offering free and easy access so that others in civil rights, tech and real estate sectors can use it, collaborate and help improve it.”

The Fair Housing Classifier acts as a protective measure, to encourage more equitable conversations with AI technology. It detects questions that could lead to discriminatory responses about legally protected groups in real estate experiences, such as search or chatbots. The classifier identifies instances of noncompliance in the input or the output, leaving the decision of how to intervene in the hands of system developers.

The Fair Housing Classifier acts as a protective measure, to encourage more equitable conversations with AI technology. It detects questions that could lead to discriminatory responses about legally protected groups in real estate experiences, such as search or chatbots.
The Fair Housing Classifier acts as a protective measure, to encourage more equitable conversations with AI technology. It detects questions that could lead to discriminatory responses about legally protected groups in real estate experiences, such as search or chatbots.

“In today’s rapidly evolving AI landscape, promoting safe, secure and trustworthy AI practices in housing and lending is becoming increasingly important to protect consumers against algorithmic harms,” said Michael Akinwumi, Ph.D., chief responsible AI officer at the National Fair Housing Alliance. “Zillow’s open-source approach sets an admirable precedent for responsible innovation. We encourage other organizations and coalition groups to actively participate, test, and enhance the model and share their findings with the public.”

The decision to offer the Fair Housing Classifier as open-source underscores Zillow’s commitment to transparency, equity and fair housing in real estate. Organizations looking to adopt the Fair Housing Classifier can access the code and comprehensive framework on GitHub. Trusted partners who would like to contribute to and enhance the classifier can reach out to the email alias on the GitHub page, through which they can request access to training data and a pretrained model, after presenting a genuine use case. This transparency is key to encouraging contributions to improve the model. Improvements to the Fair Housing Classifier can be submitted via the standard request process on GitHub.

The Fair Housing Classifier acts as a protective measure, to encourage more equitable conversations with AI technology. Zillow’s Fair Housing Classifier focuses on mitigating the risk of illegal steering — the practice of influencing a buyer’s choice of communities based upon the buyer’s legally protected characteristics under federal law.
The Fair Housing Classifier acts as a protective measure, to encourage more equitable conversations with AI technology. Zillow’s Fair Housing Classifier focuses on mitigating the risk of illegal steering — the practice of influencing a buyer’s choice of communities based upon the buyer’s legally protected characteristics under federal law.

Given the hundreds of millions of Americans searching for housing online today, it’s vital that people are equipped with tools to make getting home more equitable and transparent — and less daunting. Younger generations, renters, LGBTQ+ people and people of color are more likely to say fair housing is an issue facing them and their families, according to a recent Zillow survey of 26 major U.S. metropolitan areas. Although fair housing laws — which ensure equal and nondiscriminatory access to housing — have been in place for nearly 60 years, discrimination remains a stubborn factor in housing, Zillow’s latest Housing Aspirations Report shows. The survey found a majority of respondents (57%) reported experiencing some kind of housing discrimination, with groups such as LGBTQ+ populations reporting discrimination at higher rates. However, overall, only 42% of respondents reported that fair housing impacts them or their families, highlighting how much work is needed to continue to educate people about their rights under fair housing laws.

Making the Fair Housing Classifier available as open-source is just one way that Zillow is innovating its pro-consumer approach. Earlier this year, Zillow’s cross-functional ethical AI team published AI principles, which highlight the company’s commitment to prioritizing equitable outcomes in real estate. 

About Zillow Group: 
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences.

Zillow Group’s affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

SOURCE Zillow

New Zillow Home Loans Tool Addresses Home Buyers’ Biggest Concern: Affordability

BuyAbility, an innovative new tool from Zillow Home Loans, combines real-time mortgage rates with a buyer’s credit score and income to determine a home price comfortably within budget

SEATTLE, May 13, 2024 (PRNewswire) Today, Zillow Home Loans is introducing BuyAbility, a new tool that addresses one of the biggest considerations buyers face today: understanding what they can afford. Only offered on Zillow, BuyAbility gives buyers a personalized, real-time estimate of the home price and monthly payment that fits within their budget, and then gives insight into the likelihood of qualifying for a loan. BuyAbility is powered by real-time mortgage rates from Zillow Home Loans.

BuyAbility is a new way for buyers to understand what they can afford, giving them the information they need to make educated decisions about where they call home. The interplay between mortgage rates and a buyer’s credit score are important factors in determining affordability, but most calculators don’t factor this in. Buyers just need to add a few simple inputs unique to their financial situation, such as income, credit score and the monthly amount they’re comfortable spending, into BuyAbility. Within seconds, a personalized, real-time estimate of the home price and monthly payment that fits within their budget pops up, along with insight into their likelihood of getting approved for a mortgage at this price point.

Buyers can get started on the Home Loans tab on Zillow’s app1. A shopper’s BuyAbility calculation will update regularly with changes to mortgage rates and their credit score.

“What many people don’t realize is that your mortgage rate is highly dependent on your credit score,” said Orphe Divounguy, senior economist at Zillow Home Loans. “The better your credit score, the lower the rate you’ll qualify for, potentially saving you hundreds of dollars a month. BuyAbility is personalized to a buyer’s credit score, income and down payment, and updated regularly to reflect current mortgage rates, giving home shoppers a true understanding of their buying power. BuyAbility is a great starting point for buyers who may be hesitant to look under the hood of their finances, or share personal details with a loan officer.”

If mortgage rates change, it impacts the home price a buyer can afford and their likelihood of getting approved for a mortgage, and BuyAbility will adjust for this in real-time. For example, a median-income household would be able to afford a $380,000 home with rates at 7%; if rates went down to 6%, that same household could afford a $420,000 home2. Checking their BuyAbility regularly gives shoppers a clear and current understanding of their financial picture at any given moment.

Simulated Images
Simulated Images

BuyAbility will change the way people shop for homes. Later this year, Zillow Home Loans will make it possible for buyers to shop for homes on Zillow using their BuyAbility — rather than a price range — allowing them to quickly identify homes that truly fit their budget. And since most people think about their finances in terms of monthly budgets, buyers will soon be able to see how much each home they look at on Zillow would cost them on a monthly basis, based on their BuyAbility.

BuyAbility is an innovation only Zillow Home Loans could accomplish, personalizing Zillow’s world-class shopping experience with a buyer’s unique financial data and real-time mortgage rates from Zillow Home Loans.

About Zillow Group:
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences. 

Zillow Group’s affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

__________________________
1 Available on iOS only, with Android launching later this year.
2 Assuming fixed rates and a 20% down payment.

SOURCE Zillow