The number of for-sale homes in the U.S. is at its lowest point in at least seven years, and the shortage appears poised to get worse before it gets better. Inventory fell 7.5% annually to its lowest level in Zillow data that dates back to 2013, according to the December Zillow Real Estate Market Report.
Inventory is down year-over-year in 31 of the 35 largest U.S. housing markets, with San Antonio (up 8.1%), Detroit (up 7.6%), Atlanta (up 1.8%) and Chicago (up 0.6%) the only exceptions. Seattle (down 28.5%), San Diego (down 23%) and Sacramento (down 21.7%) saw inventory shrink the most in 2019.
Zillow said the slowdown in home value growth may be coming to an end as high demand is putting price pressure on the relatively small number of homes that are on the market. The rate of annual home value growth slowed once again from November, marking 20 consecutive months in which growth has slowed. But the gap between November and December is the smallest one-month drop since the slowdown began.
U.S. home values grew 3.7% in 2019 to $244,054, down from 3.8% year-over-year growth last month. Home values grew the most in Phoenix (up 6.5%), Columbus (up 5.9%) and Charlotte (up 5.9%) in 2019. Home values fell in just two markets — San Jose (down 6.4%) and San Francisco (down 1%).
“The end of 2019 looks a whole lot different than we might have expected at the beginning of the year,” said Skylar Olsen, director of economic research at Zillow. “A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it’s set to reverse back to accelerating growth right as we head into home shopping season with demand outpacing supply.”
The typical U.S. rent is $1,600, up 2.6% in 2019 but flat from November. Phoenix (up 8.1%) and Charlotte (up 5.3%) — also two of the top markets for home value growth — led the way in 2019, while Columbus — the second-hottest for-sale market — was the only large market in which rents fell last year, dropping 2.5%.
Mortgage rates listed on Zillow fell to 3.66% in December after starting the month at 3.72%. Rates reached their monthly low on December 16 at 3.6%, then peaked at 3.75% on December 25. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect recent changes in the market.
| Metropolitan Area | Zillow Home Value Index, December 2019 | ZHVI Year- over-Year Change | Zillow Rent Index, December 2019 | ZRI Year- over-Year Change | Inventory Year-over- Year Change |
| United States | $244,054 | 3.7% | $1,600 | 2.6% | -7.5% |
| New York, NY | $478,643 | 0.7% | $2,300 | 2.7% | -3.5% |
| Los Angeles-Long Beach-Anaheim, CA | $669,028 | 1.6% | $2,640 | 2.3% | -16.5% |
| Chicago, IL | $238,050 | 1.0% | $1,600 | 0.6% | 0.6% |
| Dallas-Fort Worth, TX | $251,455 | 2.6% | $1,470 | 2.1% | -2.6% |
| Philadelphia, PA | $248,010 | 3.2% | $1,510 | 2.0% | -13.5% |
| Houston, TX | $216,743 | 3.0% | $1,410 | 0.7% | -3.8% |
| Washington, DC | $432,977 | 3.3% | $1,980 | 2.1% | -15.0% |
| Miami-Fort Lauderdale, FL | $299,347 | 2.0% | $1,880 | 1.1% | -6.1% |
| Atlanta, GA | $237,298 | 4.8% | $1,480 | 3.5% | 1.8% |
| Boston, MA | $486,247 | 1.7% | $2,330 | 1.7% | -11.5% |
| San Francisco, CA | $1,082,771 | -1.0% | $3,130 | 0.6% | -12.9% |
| Detroit, MI | $177,774 | 3.6% | $1,210 | 0.8% | 7.6% |
| Riverside, CA | $381,279 | 3.4% | $1,920 | 2.7% | -15.5% |
| Phoenix, AZ | $286,199 | 6.5% | $1,470 | 8.1% | -21.0% |
| Seattle, WA | $521,330 | 1.9% | $2,030 | 2.5% | -28.5% |
| Minneapolis-St Paul, MN | $289,487 | 4.1% | $1,520 | 2.0% | -3.4% |
| San Diego, CA | $602,153 | 2.2% | $2,540 | 3.7% | -23.0% |
| St. Louis, MO | $177,525 | 3.4% | $1,040 | 5.1% | -11.0% |
| Tampa, FL | $228,181 | 4.0% | $1,430 | 3.6% | -12.8% |
| Baltimore, MD | $289,277 | 1.0% | $1,610 | 0.6% | -11.2% |
| Denver, CO | $433,130 | 1.8% | $1,800 | 2.9% | -10.9% |
| Pittsburgh, PA | $158,126 | 4.7% | $1,150 | 4.5% | -12.6% |
| Portland, OR | $414,260 | 1.9% | $1,690 | 3.0% | -15.7% |
| Charlotte, NC | $235,221 | 5.9% | $1,380 | 5.3% | -9.8% |
| Sacramento, CA | $423,874 | 3.6% | $1,820 | 3.4% | -21.7% |
| San Antonio, TX | $203,024 | 4.2% | $1,230 | 0.8% | 8.1% |
| Orlando, FL | $251,329 | 3.7% | $1,450 | 2.8% | -10.6% |
| Cincinnati, OH | $183,646 | 5.2% | $1,190 | 3.5% | -16.8% |
| Cleveland, OH | $157,312 | 4.3% | $1,080 | 1.9% | -5.8% |
| Kansas City, MO | $202,181 | 3.7% | $1,140 | 2.7% | -11.2% |
| Las Vegas, NV | $289,209 | 1.2% | $1,360 | 4.6% | -4.5% |
| Columbus, OH | $208,938 | 5.9% | $1,180 | -2.5% | -8.4% |
| Indianapolis, IN | $179,116 | 5.2% | $1,110 | 2.8% | N/A |
| San Jose, CA | $1,168,671 | -6.4% | $3,310 | 0.6% | -16.6% |
| Austin, TX | $333,381 | 3.7% | $1,630 | 4.5% | -15.6% |
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