Zillow Group in its latest Zillow® Market Report reported that US home values took an unexpected slowdown in September, albeit a small one. Zillow also said that competition is easing faster than normal this autumn, as buyers contend with the highest mortgage rates in more than 22 years.
Zillow reports that home shoppers are getting a little more time to find and decide on a home, but attractive listings are still moving quickly. The median time on the market before a listing goes pending is now 15 days, two days longer than in August. However, that is still two days faster than last September and roughly half the time shoppers enjoyed before the pandemic.
Home-buying conditions have continued to ease since late summer. Roughly 24% of listings in September received a price cut, a slight uptick from August and higher than 21% and 22% in 2018 and 2019, respectively. August closed-sales data, the most recent available, show fewer homes selling above their list price too—about 38% versus 40% in July. Zillow does point out that the typical US home value is $350,091. That is up by approximately 2% year-over-year. Of the 50 largest major metropolitan areas, 31 have home values higher than a year ago.
Adding additional insight and his analysis to the report, Zillow Senior Economist Jeff Tucker said:
“Mortgage rates approaching 8% are taking the wind out of the market’s sails, pushing monthly payments beyond many buyers’ budgets. While attractive listings are still moving at a brisk clip, competition among buyers is fading quickly due to the shock of mortgage rates on top of normal autumn seasonality.”
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