A year after COVID put a stronghold on housing inventory, a recent surge in new listings may mean the inventory crunch homebuyers have been dealing with for months may be showing signs of easing.
With the seasonal rise in new listings, for-sale inventory fell only 1.1% month over month, a marked improvement after months of drops, according to Zillow’s Monthly Market Report. That monthly decline was the smallest since last July and is due to inventory rising 30% from late February to late March, signaling a more traditional pattern of sellers listing their homes in the spring.
“March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand,” said Zillow economist Treh Manhertz in a press release. “With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months. That will come as welcome news to home shoppers who are seeing bidding wars and homes plucked from the market weeks faster than usual.”
In March, home values rose a record 1.2% month over month to $276,717, according to the report, the largest monthly rise in Zillow records since 1996 and jumping almost $3,200 in value from February to March. Annual appreciation also had its largest jump in 15 years, rising 10.6%.
According to the release, Zillow economists expect 6.4 million homes to sell this year, an increase of 13.5% from 2020 and the strongest since 2006. They also expect home values to increase 10.4% over the next 12 months.
The fastest monthly home value growth rates were in Austin, Texas at 2.4%, Phoenix, Arizona at 2.4% and Riverside, California, at 1.9%, the report found. The slowest growth was seen in San Jose, California (0.05%), San Francisco, California (0.6%) and Orlando, Florida (0.7%). Chicago’s home values grew 0.9%.
Additionally, March saw growth in rents nationwide up 0.9% over February, the largest monthly increase since 2014. Chicago’s rents remain some of the lowest at -2.9%.