Home buyers see first signs of affordability relief in months

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    <br /> Home buyers see first signs of affordability relief in months<br />

    PR Newswire


    Affordability remains the biggest challenge facing home buyers today, but this small step forward is a welcome sight

    • The cost of a new mortgage dropped 4.8% in November as mortgage rates dipped.
    • Housing market activity is as chilled as it has been since the start of the pandemic.
    • Rents fell by the largest amount in at least seven years.



    SEATTLE


    ,


    Dec. 16, 2022


    /PRNewswire/ — After months of watching the cost of a new mortgage rise higher and higher, home buyers finally saw some relief in November. A combination of declining home values and lower mortgage rates brought the monthly mortgage payment on a typical U.S. home down by about

    $100

    , according to the latest


    Zillow® Market Report



    1

    . Still, monthly mortgage costs are up

    $720

    , or 66.1%, over the past year

    2

    .

    U.S. home values are easing down as affordability challenges vex potential buyers. The typical U.S. home is worth

    $357,733

    , 0.2% less than in October and down 0.5% from a peak in June. Higher


    mortgage rates


    shoulder much of the responsibility for today’s chilled market. By the same token,


    mortgage rates falling


    in November brought monthly costs down for the first time since July, and for only the second time in the past 19 months. While it’s


    unlikely affordability will significantly improve


    anytime soon, November’s news is a positive sign that


    affordability may at least stabilize in 2023


    , helping households budget and plan for housing decisions in the months and years ahead.

    “The housing market entered a deep freeze this November as buyers paused their purchasing plans, likely till after New Year’s in many cases,” said Zillow senior economist

    Jeff Tucker

    . “The two big questions are whether mortgage rates will continue to decline, and whether that will be enough to bring buyers back in time for the spring selling season. In the meantime, those on the prowl for a house will benefit from motivated sellers, unusual bargains and a welcome lack of competition.”

    While national home value declines from peak levels have been minimal, some markets have seen significant changes. The largest declines from peak are in the most expensive markets —

    San Jose

    (-10.6%) and

    San Francisco

    (-9.5%) — as well as Western markets that saw the largest pandemic-era appreciation:

    Austin

    (-10.4%),

    Phoenix

    (-8.1%) and

    Las Vegas

    (-8%).

    Of the 14 major markets in which home values are still growing, almost all are less expensive than the national average and are located in the inland South or Midwest and Great Lakes regions. Relative affordability in the latter two areas is one reason


    Zillow economists expect them


    to host the healthiest housing markets in 2023.

    But the slight drop in mortgage costs isn’t reinvigorating the market yet. Between the annual winter doldrums and serious affordability concerns, activity in the market was as slow as it’s been since the outbreak of the pandemic; both sales and new listings of existing homes continued to fall in November.

    The number of listings that went pending in November fell by 16.5% from October and is down 38% compared to last November. New listings — the flow of existing homes onto the market from sellers — are also anemic, sitting 25.4% lower than last year. Many homeowners who might like to sell their home are being deterred by the higher borrowing cost they’d need to pay on their next home’s mortgage.

    Beyond the slight decline in mortgage costs, reduced activity and competition in the market brought a bit more good news to those still on the hunt for a house or those who are considering jumping in. Total inventory is up 7% year over year, by far the largest increase since at least the start of 2018. Listings’ median time on market before going pending is now 22 days — twice as long as last November and a far cry from the trough of six days in March and April.

    Renters received relief, as well. U.S. rents fell 0.4% from October to November, the


    largest one-month decline


    in the seven-year history of the Zillow Observed Rent Index. This comes on top of a 0.1% decline in October, and decisively closes the door on a period of nearly two years of above-average monthly rent increases that began in

    November 2020

    .



    Metropolitan Area*



    November Zillow Home Value Index (ZHVI) (Raw)



    November ZHVI Decline from Peak



    Monthly Mortgage Cost (at 20% Down)



    Monthly Mortgage Cost Change, Month over Month



    Total Inventory Change, Year over Year (YoY)



    Median Days on Market Change (YoY)



    Zillow Observed Rent Index (ZORI)


    United States


    $357,733


    -0.5 %


    $1,809


    -4.8 %


    7.0 %


    11


    $2,008


    New York, NY


    $619,212


    -0.3 %


    $3,125


    -4.8 %


    -14.5 %


    -6


    $3,130


    Los Angeles, CA


    $890,637


    -7.2 %


    $4,541


    -5.4 %


    9.2 %


    13


    $2,950


    Chicago, IL


    $309,755


    -1.4 %


    $1,568


    -4.8 %


    -18.9 %


    5


    $1,851


    Dallas–Fort Worth, TX


    $387,308


    -3.0 %


    $1,965


    -5.0 %


    4.0 %


    6


    $1,833


    Philadelphia, PA


    $343,687


    0.0 %


    $1,727


    -4.3 %


    -10.4 %


    4


    $1,780


    Houston, TX


    $314,507


    -0.4 %


    $1,589


    -4.8 %


    12.2 %


    16


    $1,651


    Washington, DC


    $551,159


    -0.7 %


    $2,784


    -4.7 %


    -11.0 %


    10


    $2,223


    Miami–Fort Lauderdale, FL


    $482,142


    0.0 %


    $2,418


    -4.3 %


    11.4 %


    12


    $2,788


    Atlanta, GA


    $381,824


    -0.8 %


    $1,929


    -5.0 %


    14.2 %


    18


    $1,980


    Boston, MA


    $643,642


    -2.8 %


    $3,264


    -5.1 %


    -1.1 %


    4


    $2,827


    San Francisco, CA


    $1,348,851


    -9.5 %


    $6,908


    -5.6 %


    10.3 %


    13


    $3,138


    Detroit, MI


    $238,807


    -2.7 %


    $1,208


    -4.7 %


    0.6 %


    9


    $1,454


    Riverside, CA


    $570,211


    -4.2 %


    $2,891


    -5.2 %


    24.1 %


    22


    $2,554


    Phoenix, AZ


    $442,788


    -8.1 %


    $2,261


    -6.0 %


    36.3 %


    31


    $1,911


    Seattle, WA


    $761,311


    -5.8 %


    $3,841


    -4.8 %


    37.6 %


    $2,220


    Minneapolis–St. Paul, MN


    $369,332


    -2.8 %


    $1,871


    -4.9 %


    -7.6 %


    11


    $1,631


    San Diego, CA


    $877,278


    -7.0 %


    $4,457


    -5.4 %


    17.2 %


    15


    $3,056


    St. Louis, MO


    $246,185


    -0.1 %


    $1,241


    -4.5 %


    -8.9 %


    3


    $1,283


    Tampa, FL


    $390,288


    -0.4 %


    $1,976


    -5.0 %


    41.2 %


    15


    $2,108


    Baltimore, MD


    $378,735


    0.0 %


    $1,909


    -4.6 %


    -15.3 %


    5


    $1,778


    Denver, CO


    $616,998


    -5.1 %


    $3,134


    -5.1 %


    38.1 %


    $2,006


    Pittsburgh, PA


    $208,706


    -2.8 %


    $1,055


    -4.9 %


    -0.2 %


    7


    $1,342


    Portland, OR


    $562,334


    -5.1 %


    $2,847


    -4.9 %


    17.4 %


    19


    $1,914


    Charlotte, NC


    $387,981


    -0.6 %


    $1,959


    -4.9 %


    -2.5 %


    14


    $1,801


    Sacramento, CA


    $586,357


    -6.4 %


    $2,986


    -5.2 %


    18.7 %


    19


    $2,277


    San Antonio, TX


    $341,113


    -1.0 %


    $1,724


    -4.9 %


    36.7 %


    19


    $1,494


    Orlando, FL


    $399,733


    -0.8 %


    $2,023


    -5.0 %


    26.2 %


    17


    $2,008


    Cincinnati, OH


    $266,974


    0.0 %


    $1,343


    -4.4 %


    -12.7 %


    5


    $1,514


    Cleveland, OH


    $220,070


    0.0 %


    $1,107


    -4.7 %


    -4.8 %


    5


    $1,357


    Kansas City, MO


    $294,164


    0.0 %


    $1,476


    -4.3 %


    1.1 %


    7


    $1,354


    Las Vegas, NV


    $417,523


    -8.0 %


    $2,142


    -6.5 %


    49.1 %


    33


    $1,817


    Columbus, OH


    $303,412


    -0.8 %


    $1,534


    -4.9 %


    1.1 %


    $1,472


    Indianapolis, IN


    $275,558


    0.0 %


    $1,391


    -4.6 %


    15.2 %


    10


    $1,466


    San Jose, CA


    $1,517,298


    -10.6 %


    $7,869


    -4.6 %


    3.4 %


    12


    $3,283


    Austin, TX


    $538,173


    -10.4 %


    $2,749


    -5.9 %


    38.1 %


    35


    $1,904


    Virginia Beach, VA


    $336,622


    0.0 %


    $1,696


    -4.5 %


    -16.2 %


    4


    $1,630


    Nashville, TN


    $452,612


    -1.9 %


    $2,298


    -5.2 %


    50.7 %


    22


    $1,879


    Providence, RI


    $450,111


    -1.0 %


    $2,274


    -4.7 %


    -11.6 %


    4


    $1,944


    Milwaukee, WI


    $272,113


    0.0 %


    $1,369


    -4.4 %


    -30.3 %


    -5


    $1,225


    Jacksonville, FL


    $374,053


    -1.4 %


    $1,901


    -5.1 %


    38.8 %


    26


    $1,773


    Memphis, TN


    $237,910


    0.0 %


    $1,201


    -4.8 %


    16.3 %


    10


    $1,494


    Oklahoma City, OK


    $225,718


    0.0 %


    $1,133


    -4.3 %


    13.6 %


    8


    $1,314


    Louisville, KY


    $245,599


    0.0 %


    $1,236


    -4.5 %


    -7.8 %


    8


    $1,302


    Hartford, CT


    $325,156


    0.0 %


    $1,632


    -4.5 %


    -27.2 %


    0


    $1,699


    Richmond, VA


    $344,849


    0.0 %


    $1,742


    -4.6 %


    -7.3 %


    5


    $1,567


    New Orleans, LA


    $267,805


    -1.5 %


    $1,358


    -5.3 %


    46.6 %


    24


    $1,515


    Buffalo, NY


    $246,264


    -1.1 %


    $1,239


    -4.6 %


    -8.0 %


    4


    $1,233


    Raleigh, NC


    $436,275


    -7.2 %


    $2,248


    -6.0 %


    40.5 %


    $1,761


    Birmingham, AL


    $249,311


    -0.5 %


    $1,262


    -4.9 %


    18.2 %


    12


    $1,310


    Salt Lake City, UT


    $577,450


    -7.9 %


    $2,942


    -5.1 %


    46.6 %


    24


    $1,755



    *


    Table ordered by market size



    1


    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

    .



    2


    Cost of a new mortgage on a home purchased at the Zillow Home Value Index. Assuming a 20% down payment and a 30-year, fixed-rate mortgage at the average weekly mortgage rate in November according to Freddie Mac’s

    Primary Mortgage Market Survey

    . Principal and interest only.


    About


    Zillow Group

    Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life’s next chapter. As the most visited real estate website in

    the United States

    , Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease.

    Zillow Group’s affiliates and subsidiaries include Zillow®; Zillow Premier Agent®; Zillow Home Loans™; Zillow Closing Services™; Trulia®; Out East®; StreetEasy®; HotPads®; and ShowingTime+™, which houses ShowingTime®, Bridge Interactive®, and dotloop®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (


    www.nmlsconsumeraccess.org


    ).

    Cision
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    SOURCE Zillow

    PR Newswire
    December 16, 2022 – 5:00 AM PST
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