An August 23rd press release from Zillow shows U.S. home-value growth slowed in 20 of the 35 largest housing markets, while the rental market is also showing signs of a slowdown. Zillow’s report is another reminder that it’s important to use a knowledgeable mortgage broker when buying a home, to help you navigate the homebuying process when the market is in turmoil.
Annual Home-Value Growth Changes
In the United States, average home-value growth rose from 7.3% in July 2017 to 8% in July 2018. However, this is not reflective of the trend in many housing markets around the country. Many of the 35 largest metropolitan areas in the U.S. experienced a slowdown in home-value growth from July 2017 to July 2018, leading real estate experts to believe that the market may be starting to take a turn.
The housing markets with the highest home prices saw the largest slowdown in home-value growth. Despite strong job growth and high demand in areas like Tampa and Seattle, home-value growth slowed dramatically from the previous year as buyers were less willing to pay the increasing prices.
Changes to Florida and Pennsylvania Housing Markets
Metropolitan areas in Florida and Pennsylvania experienced dramatic shifts in home-value growth from July 2017 until July 2018. In Tampa, home-value growth slowed from 14.2% to 10.6%, Orlando from 12.6% to 9.8%, and the combined Miami and Fort Lauderdale area from 10.3% to 8.4%. Although home values are still increasing in these markets, each metro mentioned experienced a large drop over the course of a single year.
The trend continued in parts of Pennsylvania, with Philadelphia’s home-value growth moving down from 5.9% to 5.5%. Pittsburgh, however, saw an increase from 4.4% to 7.8%.
According to the July 2018 Zillow Market Report, the changes in home-value growth can be partially attributed to an increase in homes for sale in the largest metropolitan areas. 19 of the 35 metro areas studied showed an increase in homes available from July 2017 to July 2018.
The median value for homes for sale in the U.S. in July 2018 was $218,000, an 8% increase over the median value in July 2017.
Home Inventory Trends
Around the country, the rate of home inventory growth is slowing. While there is growth in the number of homes for sale, the rates of growth are slower than in July 2017, with some of the largest metros experiencing a reduction in the number of homes available. Philadelphia saw a 9.3% reduction in inventory, Pittsburgh a 13.1% reduction, Orlando a 9.6% reduction, and Tampa only saw a 0.2% increase from 2017.
Rental Market Changes in the United States
In most of the metro areas experiencing a downturn in home values, there is a more mixed reaction in the rental market. Rental prices are generally still rising, though the national average rental value growth rate dropped from 1.6% in July 2017 to 0.5% in July 2018.
Based on the Zillow Rent Index for 2018, the median rental price in the United States is $1,440 per month.
Not Yet a Buyer’s Market
Experts observing the market say that despite the slowed growth in home values around the country, it’s too early to determine whether it’s a buyer’s market. With continued reduction in home values throughout the country, it may turn into a buyer’s market in a few years. However, median home values are at their highest point on record, which is evidence that this is still a seller’s market. Trends in various metropolitan areas need to be monitored for any bounce back or dramatic change over the next few years.
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
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