Zillow: Low inventory pushing up home prices in U.S.
‘The struggle will continue for home shoppers this summer,’ says economist
While home value growth was predicted to slow early this year, low inventory, stronger wage growth and low mortgage rates are pushing home values higher than predicted, according to Zillow’s April Real Estate Report.
According to Zillow, home values nationally rose 4.9 percent over the past year, to a median home value of $187,000.
Compounding the rise in prices is shrinking inventory — in the number of homes for sale in the U.S declined by 3.4 percent from April 2015. Worse, there are 7.8 percent fewer entry-level homes for sale in the U.S. than a year ago, Zillow reported.
Zillow had forecasted that home values would grow 2 percent from April 2015 to April 2016, and outside housing experts said they expect slower growth in coming years.
Zillow reported that markets with the tightest inventory have some of the fastest rising home values. Over the past two years, the number of homes for sale in Portland, Ore., for instance, has decreased by almost 40 percent, with home values up 15 percent over the past 12 months.
Similar patterns hold true in hot markets like Dallas, Seattle and Denver, where inventory is down more than 20 percent and home value growth is in the double-digits, according to Zillow.
"The struggle will continue for home shoppers this summer," said Zillow’s chief economist, Dr. Svenja Gudell. “In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer's selling season's borders will most likely be blurred again as many buyers are left without homes and will need to keep searching."