Lack of Available Homes and Eager Buyers Continued to Push Home Prices Higher in May

Zillow® Group, Inc. on Monday (6-12-23) released its market report for May. The report reveals that competition among buyers over few available houses has made this home shopping season unusually hot. At the same time, high mortgage rates are continuing to deter homeowners from listing, pushing inventory levels to record lows.

According to the report, typical US home values increased by 1.4% from April to May, the strongest monthly price growth since June 2022. While that is a bit less active that the previous two springs, it is hotter than in 2018 and 2019. The typical home value is $346,856—up 0.9% year-over-year and up 3.4% from January’s recent low.

Zillow says a new loan on a home priced at the typical value in the US would have a monthly mortgage payment of just under $1,800. Zillow noted that monthly payment is 22% higher than last year, double that of May 2019, and the second highest on record after October 2022.

Adding additional background and his analysis to the May report, Zillow’s senior economist, Dr. Jeff Tucker, said:

“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. 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.”