Home price growth slows but rent keeps rising at 2019 ends
Both home prices and rents continued to increase as the year reached an end, but one of those two is increasing faster than the other.
Home values in the U.S. grew to $243,225 in November, which was the smallest annual growth since January 2013, according to Zillow.
Annual home value growth has now slowed in each of the past 19 months, Zillow noted, but slowdown has been gradual.
According to Zillow, the drop in year-over-year growth has not exceeded 0.3 percentage points from one month to the next during this period.
“As we approach the winter holidays, housing, too, is taking a breather,” said Skylar Olsen, Zillow’s director of economic research. “Motivated sellers trying to close before the end of the year dropped their list prices in September and October, with November numbers showing the expected quiet in listing activity.”
Out of the 35 largest metro areas, San Antonio and Washington, D.C. are the only to be growing at a faster annual rate than they were this time last year.
Meanwhile, San Francisco, San Jose, Las Vegas and Seattle have slowed down the most, with San Jose and San Francisco seeing a decline in year over year home values.
On the other hand, rent growth accelerated for the fifth straight month, up 2.3% annually to $1,600.
But, for-sale inventory fell 6.4% from last year, and there are 102,463 fewer homes on the market than a year ago.
Inventory fell the most in Seattle, which is down 28.8%.
“That quiet is echoed by the slower annual appreciation and the lower-than-normal available inventory. But as we anticipate longer days to come, so too we anticipate some relief for housing,” Olsen continued. “Lifting housing starts and permit numbers, strong jobs reports and the steady progress towards more stable and sustainable home value appreciation all point to a healthier 2020 for housing.”
Phoenix is the fastest-growing market, up 6.1% year over year, due to being relatively affordable and solid employment numbers, Zillow said. That said, Phoenix is also the fastest-growing renters’ market, up 7.6% year over year.
A common trend this year is the housing inventory shortage, now having reached the lowest level in Zillow data dating back to 2013, with a 6.4% year over year drop.