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Zillow Housing Update May 2022 | Zillow Real Estate Report - YouTube

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every quarter i scallowed the zilla

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website in search of data showing the

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changes in the u.s housing market it's

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not my sole source of information but

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zillow does measure the housing market

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in a unique manner that provides great

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insight for those of us who really care

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about what is truly going on in housing

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one of the hardest things about

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reporting on the u.s housing market is

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finding reputable data sources that can

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give us what we need to properly

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evaluate current conditions but i've

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become a big believer in the data that

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zillow shares on the back end of its

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website if you want to know what the

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data says without a bunch of scare

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tactics and hype that most reporters

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provide then watch this report on the

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u.s housing market with zillow data and

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you will walk away with a logical

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forecast of what to expect for the next

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year in housing

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the first graph in today's zillow real

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estate update shows zillow's estimated

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number of unique properties sold each

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month which we use to determine whether

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demand is rising or falling the blue

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bars measure the number of homes sold

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while the yellow bars report the

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year-over-year change in sales when the

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yellow bars rise above the horizontal

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axis unit sales have grown when the

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yellow bars fall below the horizontal

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axis unit sales have declined march home

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sales revealed that for nine straight

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months home sales have declined in the

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u.s when compared to the same months in

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the year prior this is non-seasonal

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information as each month's change is a

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comparison of the same month in two

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consecutive years for example the number

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of homes sold in march 2022 was 17 lower

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than the number of homes sold in march

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2021 with nine straight months of

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declining u.s home sales does this

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absolutely mean that demand is falling

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historically the answer would be a

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resounding yes but i'm not so sure this

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is the full answer today let's take a

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look at a handful of other key metrics

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and then return to this important

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question this graph plots the average

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30-year fixed mortgage interest rate

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since 2016 and the most recent month

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show a definitive move to higher ground

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when i was preparing this graph on april

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28th i checked the mortgage news daily

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website and it was reporting that the

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current rate was 5.3 percent while the

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one year ago rate was 3.14

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meaning the cost of money for home

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buyers has pushed up 69 percent in just

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one year

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just chew on that statistic for a moment

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the year-over-year change in mortgage

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interest rates is nearly 70 percent

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higher than a year ago a move like that

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has an immediate impact in the market

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that i liken to sticker shock the home

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that people thought they could afford a

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few months ago is now more expensive and

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requires a higher mortgage payment even

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if they finance the same amount of money

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this results in them having to consider

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smaller homes for the payment amount

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they had planned on the larger home

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skyrocketing mortgage interest rates

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have cooled by our demand yet i believe

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there's another factor that has greatly

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contributed to the number of homes sold

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each month declining for the past nine

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months in this graph zillow is showing

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the unique listings that were active at

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any given time in a month since the

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beginning of 2019 and despite a decline

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in home sales the inventory of homes for

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sale continues to shrink the blue field

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measures the number of listings while

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the red line plots the year-over-year

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change in inventory look to where the

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red line crosses the dash blue line in

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2019 as that is when the market shifted

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from inventory growth to inventory

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reduction in 2019 the market was already

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slightly skewed to the sellers as

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inventory levels were below 6 months of

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supply as time moved forward the low

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level of supply got continually worse in

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bidding wars among buyers became the

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norm the peak of the market inventories

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were 600 000 plus homes too few and

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homebuilder production has not yet

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stepped up to fill in the void though

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there are signs that this might finally

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reverse in 2022 for a handful of markets

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but not the u.s housing market overall i

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believe the historically low number of

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homes for sale has been a significant

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piece of the declining sales dilemma as

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buyers have been trying to obtain loans

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before low mortgage interest rates go

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away forever when you combine rising

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rates and declining inventories it's no

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wonder that the number of home sales is

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falling this is not the first time i've

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pointed out the double whammy of rising

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prices coupled with rising mortgage

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interest rates our longtime subscribers

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here have been watching this escalate if

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you're not a subscriber please click the

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thumbs up like button and subscribe now

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so that you get all of our new content

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when it is fresh this will help you know

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what's going on you'll see the data

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explained we focus on the facts not hype

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subscribe now you'll be glad you did

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this next graph plots the median price

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at which homes across the us were listed

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and sold the blue field in the graph

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shows the median list price while the

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red line shows zillow's estimate of the

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median home sales price during the same

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period of time the blue field shows

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there's a seasonal pattern on the median

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list price with prices starting low at

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the beginning of the year moving higher

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during the summer and then falling

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slightly towards the end of the year the

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median sales price does not move in a

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similar manner i believe this is showing

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us two things first home prices

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generally rise so it makes sense that

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end of year asking prices are higher

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than beginning of the year asking prices

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second it shows that sellers who tried

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too high of an asking price earlier in

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the year ended up dropping their prices

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to get their homes sold before the end

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of the year remember a homeowner can ask

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any price they like but to get sold they

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have to meet the market at the right

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price

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the red line shows that there is no

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actual inner year cycle for prices they

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just generally rise the red line has

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been rising faster of late and this is

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primarily linked to the gross

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discrepancy between supply and demand

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even with demand falling we should not

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expect to see any relief from the rising

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slope of the median sales price until we

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start fixing the inventory shortage that

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has plagued the housing market since

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2019. this graph is zillow's take on the

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median home price zillow explains the

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results as a smooth

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seasonally adjusted measure of the

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typical home value for the single-family

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homes condominiums and co-ops including

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market changes across the united states

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it reflects the typical value of homes

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in the 35th to 65th percentile range in

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other words it approximates the median

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by swiping the middle third of the

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market and analyzing it over time you

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might have noticed that the horizontal

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axis includes a date range that extends

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to a year from now zillow has estimated

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home values from 2000 through march of

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next year with a forecast that home

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values will rise 14.9 percent over the

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next 12 months zillow's home value index

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is a clear image of how bad our housing

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market is behaving look at the slope of

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home value growth since 2020 it's

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toxically unhealthy if you want some

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insight into what this price movement

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will do to the housing market i urge you

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to watch some of my videos on home

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affordability i am forecasting a move to

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a renner nation as home affordability

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plummets the final graph in today's

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zillow housing update serves as a test

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to ensure that i'm not overreacting to

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moves in the for sale market you see the

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for sale market and the for rent market

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do not operate in separate vacuums

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historically when home affordability

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surged a segment of would-be sellers

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became landlords as declining demand

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made it harder to get homes sold when

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home affordability improved those

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landlords flipped their homes over to

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the for sale market to finally get them

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sold we would see inventory shift from

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one side of the market to the other so

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when one was oversupplied it meant the

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other would take up excess inventory but

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as you'll see in this final graph an

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inventory shift cannot happen today this

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graph measures what zillow refers to as

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the typical observed market rental rate

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and like the previous graph it takes a

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swipe from the middle of the market to

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approximate the median and it shows why

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we're not going to be able to fix this

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housing market in the same way the

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previous one was fixed the blue area

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measures the rental rate index each

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month or the median rent while the red

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line plots the year-over-year percentage

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change each month it is this red line

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that should make your head spin as the

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inventory of homes for sale has declined

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so too has the inventory of homes for

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rent how do we know rental inventory is

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dropping without actually having a data

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set of rental units supply we can deduce

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this because rental rates are soaring in

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march the median rental rate of 1904 was

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nearly 17 percent higher than the median

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rental rate of sixteen hundred and

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thirty dollars recorded in march of

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twenty twenty one can you imagine if

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your monthly rent was increased from

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sixteen hundred and thirty dollars to

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nineteen hundred and four dollars per

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month if the rate remains the same over

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the next year that same median unit will

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rent for twenty two hundred and twenty

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four dollars per month a rate hike of

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nearly six hundred dollars monthly in

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just two years

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so here are the important lessons from

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this quarterly zillow housing update

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the rental rates graph is the smoking

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gun that lets us know just how troubled

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the u.s housing market has become when

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people get priced out of the for sale

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market they no longer can turn to the

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for rent market as they'll be priced out

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of that too we have not been creating

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enough residential units to house our

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growing population and unfortunately

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inflation has pushed the cost of new

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construction to a level where the median

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home buyer cannot be served i'm having a

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hard time finding a solution to what

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could be a severe turn towards a render

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nation where control of prices and

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rental rates move from main street to

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wall street we are seeing more

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out-of-town large-scale investors

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consume single-family detached homes

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which historically were not included in

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their housing consumption menu zillow's

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current data shows that inventory in the

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us is falling and from what i'm reading

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very few local markets around the

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country will be spared from soaring

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prices and soaring rents my advice to

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all but the wealthiest of americans is

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this if you're happy in your home be

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glad and enjoy it but if you're unhappy

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you're running out of time to move into

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a home that you will both enjoy and be

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able to afford go secure a home before

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it's out of your reach for good have you

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been thinking about moving but you're

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worried you'll sell your home and not be

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able to find a replacement is the common

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concern today well we have a solution

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that has been making people very happy

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lately we'll get your home sold with a

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provision you can stay until you find

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the replacement home if you never find

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the right one you don't have to move at

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all i've included a link below to our

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stress-free move check it out and see if

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it will help you get the home of your

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dreams if you want to see more videos

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about current housing market conditions

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i've assembled a great playlist that you

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can view by clicking on the box on the

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top left corner of your screen to see a

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