Pre-pandemic forecasts for a frantic home shopping season were put on ice in early spring….
Pre-pandemic forecasts for a frantic home shopping season were put on ice in early spring. But now the frenzy is here — homes are flying off the market as heavy demand combines with limited inventory, according to the June Real Estate Market Report from online real estate company Zillow.
Home values continued their steady, upward trajectory in June, growing 4.3% year over year to $252,178.
That’s a slightly faster pace than last month, and the same rate as June 2019 in what has been a stable period for home values.
“Buyers have come roaring back to the housing market after the initial shock of the pandemic and layoffs faded, and all signs indicate the hot spring selling season we anticipated has shifted to the summer,” said Zillow economist Jeff Tucker. “But those shoppers are competing over a shockingly small pool of homes, causing prices to resume their upward climb after a little softness this spring.”
Spring is typically a season of rent growth, but that hasn’t been the case this year. During the past five years, rents have grown about $30 on average between March and June.
This year, the typical rent has fallen $5 nationally over that period, and almost $60 in San Jose and New York.
Despite the slight dip nationally, rents grew in 27 of the 50 largest U.S. metros this spring. And rents are higher than a year ago in 43 of the top 50 metros.
“Rents have felt some impact from the pandemic, stagnating through the spring when we normally see them make most of their annual gains,” Tucker said. “Boosted unemployment benefits and eviction moratoriums have helped keep renters in their homes so far, but as those expire there’s plenty of uncertainty about what comes next.”
Mortgage rates listed by third-party lenders on Zillow started the month at 3.38% and rose to a peak of 3.48% on June 5. Rates ended June at their monthly low of 3.23%.