Is the real estate market getting back to normal? Could be.

Typical Home Value

The typical home value eclipsed $350,000 for the first time as healthy demand from buyers continues to collide with reluctant sellers, according to the latest Zillow Market Report.1

“Home buyers have persisted this spring despite daunting affordability challenges and record-low inventory,” said Jeff Tucker, senior economist at Zillow in a news release. “Demand typically begins to ease in the summer, and there are signs that competition is waning, but large price declines are unlikely until more homeowners list their homes for sale.”

The typical U.S. home value climbed 1.4% from May to June, continuing a four-month hot streak. The new peak of $350,213 is almost 1% higher than last June and barely edges out the previous Zillow Home Value Index record set in July 2022.

From Hot Spots to Soft Spots

Affordability remains the key to market strength, as lower-priced metro areas posted the largest monthly gains; ChicagoBuffaloNew Orleans, and Hartford all notched 2.1% monthly growth, with Detroit close behind at 2%. Those markets all have typical home values lower than the national average.Inn May, home values rose from the previous month in all 50 of the largest metro areas. The slowest monthly growth was in Austin (0.4%), followed by JacksonvilleMemphisSan Antonio, and Birmingham, which all saw 0.8% increases.

Drought of New Listings Intensifies

The flow of new homes for sale ticked up 2.4% month over month, but the annual deficit deepened, now standing at 28% fewer listings than a year ago. June is usually one of the best months for fresh inventory, but only 376,500 new listings arrived on the market this year. That’s closer to levels seen in the slower months of February and October than to average new listings in June (505,100), according to Zillow data reaching back to 2018.

A lack of new listings has dogged the housing market for nearly a year, and higher mortgage rates remain the chief suspect. Rates at 6.8% this week (the highest since November, up from 5.1% a year ago and 3% two years ago) make it incredibly costly for homeowners — most of whom have a mortgage well below today’s rates — to borrow for their next home purchase.

Another explanation could be that homeowners are holding out for higher prices. Home values have steadily increased since January in much of the country, but remain below peaks reached last summer in many markets.

“It could be that some homeowners have been waiting until prices set new highs in their market before opting to cash in their chips,” Tucker said.

The total pool of existing homes for sale is lower than any in June since at least 2018. It’s down 10% from last year and a tremendous 45% below June 2019.

Drop-off in Demand Means Less Competition

Potential buyers could see some slight relief on the horizon, as a few metrics indicate demand and competition are cooling. Sales measured by newly pending listings dipped almost 5% from May to June, following seasonal trends seen in 2022 and before the pandemic, when accepted offers crested in May.

Listings also lasted longer in June, 11 days before the typical listing went pending, compared to 10 in May. But that’s still a much faster market than in 2019 when listings went pending in 21 days.

Rent Growth Back to Normal

Zillow’s latest monthly rent report shows rent growth is back to pre-pandemic norms for this time of year, about 0.6% per month. San Diego overtook San Francisco as the third-most-expensive place to rent.

Metropolitan Area*

June Zillow
Home Value
Index (ZHVI)
(Raw)

ZHVI Change,
Month over Month
(MoM)

Monthly
Mortgage
Payment
(20% down)

Monthly
Mortgage
Payment
Change
Since 2019

New
Inventory
Change,
YoY

Total
Inventory
Change,
YoY

Listings
typical days
on market
before pending

United States

$350,213

1.4 %

$1,804

105.9 %

-28.1 %

-10.4 %

11

New York, NY

$617,792

1.7 %

$3,172

81.7 %

-36.7 %

-25.8 %

24

Los Angeles, CA

$902,809

1.9 %

$4,619

90.6 %

-33.6 %

-25.9 %

13

Chicago, IL

$307,485

2.1 %

$1,581

81.9 %

-28.5 %

-24.8 %

7

Dallas, TX

$376,959

1.0 %

$1,945

100.5 %

-23.5 %

9.7 %

11

Houston, TX

$307,175

1.0 %

$1,585

95.7 %

-20.4 %

6.8 %

13

Washington, DC

$545,767

1.1 %

$2,806

79.3 %

-35.2 %

-32.9 %

6

Philadelphia, PA

$346,662

1.7 %

$1,783

97.9 %

-31.8 %

-23.3 %

8

Miami, FL

$463,616

1.7 %

$2,373

124.3 %

-30.6 %

7.9 %

21

Atlanta, GA

$375,553

1.2 %

$1,934

119.0 %

-32.4 %

-13.2 %

13

Boston, MA

$658,657

1.8 %

$3,387

84.4 %

-39.5 %

-36.8 %

7

Phoenix, AZ

$448,032

1.0 %

$2,307

112.2 %

-48.0 %

-24.2 %

22

San Francisco, CA

$1,128,205

1.0 %

$5,805

74.8 %

-37.2 %

-31.7 %

13

Riverside, CA

$555,973

1.1 %

$2,861

101.5 %

-38.1 %

-24.1 %

14

Detroit, MI

$247,141

2.0 %

$1,272

91.3 %

-28.9 %

-20.9 %

6

Seattle, WA

$710,133

1.5 %

$3,644

91.7 %

-40.9 %

-33.8 %

7

Minneapolis, MN

$374,665

1.3 %

$1,937

79.2 %

-20.7 %

-17.1 %

13

San Diego, CA

$888,246

1.7 %

$4,545

100.8 %

-35.5 %

-33.1 %

9

Tampa, FL

$377,038

1.2 %

$1,941

129.7 %

-28.3 %

0.3 %

11

Denver, CO

$587,415

0.9 %

$3,024

82.9 %

-23.1 %

-4.3 %

7

Baltimore, MD

$374,407

1.3 %

$1,929

82.3 %

-27.4 %

-24.1 %

6

St. Louis, MO

$245,165

1.8 %

$1,260

95.7 %

-24.0 %

-13.5 %

5

Orlando, FL

$389,423

0.9 %

$2,008

113.2 %

-30.8 %

-5.1 %

11

Charlotte, NC

$372,192

1.7 %

$1,911

124.3 %

-34.8 %

-1.1 %

7

San Antonio, TX

$295,228

0.8 %

$1,525

102.5 %

-23.5 %

22.6 %

19

Portland, OR

$550,249

1.0 %

$2,835

84.3 %

-29.8 %

-13.8 %

9

Sacramento, CA

$567,406

1.4 %

$2,918

83.4 %

-30.8 %

-30.9 %

9

Pittsburgh, PA

$207,088

1.9 %

$1,068

86.1 %

-24.9 %

-14.5 %

7

Cincinnati, OH

$275,204

1.7 %

$1,414

104.0 %

-27.1 %

-22.3 %

4

Austin, TX

$486,097

0.4 %

$2,521

109.6 %

-32.9 %

8.5 %

33

Las Vegas, NV

$403,837

1.1 %

$2,079

84.0 %

-49.9 %

-28.1 %

14

Kansas City, MO

$296,126

1.5 %

$1,523

103.6 %

-23.4 %

-15.0 %

4

Columbus, OH

$306,164

1.7 %

$1,572

106.0 %

-23.7 %

-15.5 %

4

Indianapolis, IN

$273,242

1.6 %

$1,407

116.1 %

-26.1 %

-11.7 %

6

Cleveland, OH

$218,515

1.8 %

$1,127

95.3 %

-24.7 %

-15.5 %

5

San Jose, CA

$1,460,735

1.6 %

$7,460

79.8 %

-36.4 %

-39.8 %

9

Nashville, TN

$439,109

1.4 %

$2,259

117.6 %

-30.0 %

2.2 %

11

Virginia Beach, VA

$336,016

1.1 %

$1,731

90.2 %

-28.6 %

-24.5 %

17

Providence, RI

$451,082

1.6 %

$2,324

98.6 %

-34.5 %

-32.9 %

8

Jacksonville, FL

$354,880

0.8 %

$1,836

121.5 %

-28.1 %

10.5 %

29

Milwaukee, WI

$329,908

1.8 %

$1,699

84.5 %

-24.6 %

-29.0 %

14

Oklahoma City, OK

$229,137

1.0 %

$1,181

105.4 %

-25.4 %

4.9 %

8

Raleigh, NC

$435,580

1.2 %

$2,242

110.7 %

-34.0 %

-19.8 %

6

Memphis, TN

$235,913

0.8 %

$1,221

115.3 %

-23.4 %

4.0 %

20

Richmond, VA

$354,845

1.5 %

$1,823

103.7 %

-33.5 %

-27.5 %

5

Louisville, KY

$252,307

1.1 %

$1,301

90.8 %

-24.7 %

-18.6 %

5

New Orleans, LA

$246,896

2.1 %

$1,273

73.2 %

-22.7 %

41.9 %

32

Salt Lake City, UT

$535,640

1.1 %

$2,760

107.2 %

-28.7 %

-10.1 %

10

Hartford, CT

$333,826

2.1 %

$1,717

87.9 %

-26.0 %

-26.4 %

5

Buffalo, NY

$252,260

2.1 %

$1,300

96.4 %

-25.6 %

-19.5 %

10

Birmingham, AL

$251,109

0.8 %

$1,298

106.4 %

-23.7 %

-2.6 %

8

*

The table is ordered by market size 

1

The Zillow Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research.

Source: Zillow