The spring housing market is back in favor of sellers, as rising demand meets continued low supply, driving up home values, according to a new Zillow report.
From March to April, home values grew 1%, their largest increase since June and in line with pre-pandemic norms. Pending home sales were 21% below where they were a year ago; the lack of new listings is growing, with April having 28% fewer than last year.
Zillow senior economist Jeff Tucker says buyers are back on the hunt during what’s typically the hottest time of the year, thanks to a normal seasonal surge in demand and slightly lower mortgage rates.
“Unfortunately, many potential sellers have ghosted the market this spring, concentrating buyer demand on the few listings that do come to market and fueling price growth, especially for more affordable and well-presented houses,” Tucker said.
And while home values are still 2.2% below last July’s peak, April’s home values were 1.5% above where they were last year and 38% higher than they were in 2020. Once again, increased competition for lower-priced homes is driving ”far higher annual appreciation for the least expensive houses,” according to the report.
In Boston, April’s average home value was $630,675, a 1.4% month-over-month increase. Pending sales rose 10% last month, while new inventory fell 7% from March. Year over year, the inventory of available homes for sale was down 32% in the Bay State.
Housing inventory is an issue across the U.S. as sellers continue to step back. While the spring usually sees a normal trend of rising inventory, new listings nationally fell by 0.5% in April. According to the report, total inventory was up only 3% annually and was 46% lower than it was in 2019.