Zillow Group, Inc. reports developments across its real estate technology platform, which connects consumers with listings, agents, loan officers, rental housing providers and other real estate professionals. Recurring company updates cover residential revenue, rentals, mortgage origination through Zillow Home Loans, for-sale marketplace activity, agent software tools, New Construction, Zillow Showcase and pre-market listing products such as Zillow Preview.
The company also publishes housing-market research based on Zillow data, including home value, rent, inventory, buyer-engagement and listing-speed measures. News frequently references Zillow brands and tools used across shopping, renting, buying, selling and financing homes, including Zillow, Trulia, StreetEasy, HotPads, ShowingTime, dotloop and related rental and closing services.
Home values in the U.S. rose sharply in December 2020, with typical values reaching $266,104, marking an 8.4% increase year-over-year—the highest since January 2014. Monthly growth stood at 1.1%, the fastest increase since 1996. Key cities like Phoenix led with 15.3% growth. Record-low mortgage rates, averaging 2.63%, kept buying affordable despite rising prices. Rents saw a slight increase, up 0.2% since November, though annual growth remained stagnant at just 0.8%. Overall, the housing market showed strong demand, with median time on the market at just 14 days.
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A recent Zillow analysis highlights the financial challenges faced by renters due to the COVID-19 pandemic, revealing that many pay over 80% of their unemployment benefits on rent. The new fiscal stimulus package provides an extra $300 weekly, reducing this burden to approximately 43%. However, despite this relief, millions remain behind on rent, accumulating an average debt of $6,000. The analysis also points out that once rent burdens exceed 30%, homelessness rates increase significantly. Housing vulnerability is likely to be a pressing issue for the incoming administration.
The Zillow analysis reports a significant rise in U.S. million-dollar cities, with 45 new additions in the past year, marking the largest annual increase in over a decade. Currently, there are 312 cities with typical home values exceeding $1 million, an increase of 104 from five years ago. This surge reflects a 7.5% annual appreciation in home values, driven by heightened demand during the pandemic. Coastal metro areas dominate the list, with San Francisco leading at 61 cities. High-value markets like Atherton, Calif. ($6.6 million) and Hunts Point, Wash. ($6 million) top the rankings.
The latest Zillow analysis reveals that home values for Black- and Latinx-owned homes remain lower than the national average, with gaps of 16.2% and 10.2%, respectively. However, these disparities have narrowed by about 4 percentage points since the Great Recession. The report indicates that Black and Latinx homeowners are seeing a recovery post-pandemic, aided by low mortgage rates and extended forbearance programs. While homeownership rates are increasing, inequality persists across different states, with Detroit showing a staggering 46% value gap.
Zillow forecasts a robust housing market in 2021, anticipating the highest annual home sales growth in nearly 40 years, with a projected increase of 21.9% leading to 6.9 million homes sold. This surge is fueled by economic recovery, demographic factors, and a growing demand for city living as local economies reopen. However, rising home prices and mortgage rates pose affordability challenges for buyers, especially first-time homebuyers. The expected digital-first trend in real estate transactions will facilitate quicker connections between buyers and sellers, streamlining the home shopping experience.
Rent appreciation is recovering as home values surge, according to Zillow's latest Real Estate Market Report. Rent increased by 1.1% year-over-year in November, with typical U.S. rent at $1,734. Zillow predicts 2021 sales will be the strongest since 2005, with home values expected to rise by 10.3% from November 2020. In November, typical home values grew by 7.5% year-over-year, hitting $263,351. Strong demand and low inventory are driving this growth, despite challenges facing renters affected by the pandemic.
This press release from Zillow highlights significant changes in the real estate market during 2020, driven by the pandemic. Key points include a rise in remote work leading to increased housing options and demand, with nearly two million renters becoming potential homeowners. Record low interest rates spurred first-time buyers, while a preference for digital home buying experiences grew. Despite initial fears of an urban exodus, Zillow reported no significant shift from urban to suburban markets, with some cities experiencing stable demand. The impact of COVID-19 on renters, particularly among women and minorities, was also noted.
According to StreetEasy, New York City rents have experienced a greater decline in 2020 than during the Great Recession. Manhattan saw a 12.7% year-over-year drop, with a median asking rent of $2,800, the lowest in a decade. Brooklyn and Queens followed with declines of 6.3% and 5.7%, respectively. The rental inventory has surged, doubling year-over-year to nearly 37,000 additional homes. StreetEasy attributes these trends to the economic fallout from the pandemic, suggesting a sluggish recovery ahead despite potential boosts from COVID-19 vaccines.
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