Homebuyer competition is driving up prices, as inventory constraints continue to plague the real estate market. 

The summer market is hotter than it’s been in years. Buyers are once again in bidding wars over available homes as potential sellers continue to wait out rising mortgage rates, according to Zillow’s latest market report. 

Despite few options and those increasing mortgage rates, which have deterred homeowners from listing their properties, April sales rose 10% from April to May as inventory hit record lows last month. 

“Many homeowners are still opting not to sell and give up historically low mortgage rates. But those who do have been rewarded with bidding wars as buyers compete for limited options,” said Jeff Tucker, Zillow senior economist. “Spring is traditionally the hottest time of year in the housing market, and 2023 has been no exception. Time will tell if seasonal price slowdowns arrive on time this year, later in summer.”

New listings in May fell 23% from last year as inventory is down to record lows for this time of year, according to the report. Homes for sale on Zillow in May were down 3.1% from last year and were down 46% from May 2019. 

Home values across the country grew 1.4% from April to May, the strongest monthly appreciation since June 2022, according to Zillow. Nationally, the typical home value is $346,856, up 0.9% from last year and up 3.4% from January’s low. 

Chicago’s average May home value was $302,085, up 1.9% from April.

As home values grew, so too did mortgage rates. Zillow found the monthly mortgage on a typically valued home was just under $1,800 (the second highest on record), 22% higher than it was last year and double the May 2019 mortgage payment. 

Chicago’s monthly mortgage payment was $1,565, a $677 increase from 2019.