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.
The housing market is experiencing seasonal cooling after a robust summer, as reported by Zillow. Year-over-year list prices have stabilized at 11.7% above 2019, while newly pending sales rose 19.3% compared to last year, though saw a slight decline of 1.5% week-over-week. Inventory continues to dwindle, down 37.2% year-over-year. The median list price remains steady at $346,080, and the median sale price is up 11.4% since 2019. Many potential sellers are hesitant to enter the market, anticipating better price conditions in the future.
Monthly mortgage payments for U.S. homeowners are more affordable due to record-low mortgage rates, recently dipping to 2.8%. Homeowners paid 17.5% of their income towards mortgages in September, down from 19.6% two years earlier. However, home prices have surged 38.3% since 2014, greatly outpacing income growth of 18.8%, making down payments a significant challenge for potential buyers. A typical home now costs over three times the median income, the highest since 2014. Zillow anticipates a 7% increase in home values over the next year, further complicating affordability.
A recent Zillow survey reveals that 34% of potential home sellers are hesitant to enter the market due to pandemic-related uncertainties. Key factors include financial instability (31%) and changes in employment (27%). The survey shows that nearly 40% believe waiting will yield a better sale price as home values have risen nearly 11% year-over-year. Despite record low mortgage rates, over 30% hold off due to concerns about finding or affording new homes. The U.S. housing market faces a supply crisis with inventory down 37% year-over-year, leaving significantly fewer homes available for sale.
Zillow's Weekly Market Report highlights a continued surge in the housing market as prices hit new highs while inventory plummets nearly 50% in major metros. The report indicates newly pending sales are up 19.6% year-over-year but have declined by 4.9% since last month. Median list prices rose to $346,259, marking an 11.7% annual increase. Concurrently, existing home sales surged at the fastest annual pace since 2010, reaching 6.54 million, up 20.9% from last year. Despite the price hikes, low mortgage rates mean manageable monthly payments for buyers.
In Q3 2020, Manhattan's median asking rent dropped to $2,990, a 7.8% year-over-year decrease, falling below $3,000 for the first time in nine years. This drop was driven by a record 44.7% of rental listings being discounted, increasing by 22.7 percentage points from the previous year. Additionally, rental inventory soared by 69.8% to 72,267 listings. Brooklyn and Queens also saw declines in their rental markets, with respective decreases of 2.5% and 2.2%. The surge in discounts and increased inventory indicate a struggling rental market amid the pandemic.
On October 22, 2020, Zillow discussed the current housing market, characterized by low inventory and high demand, making it a seller's market. However, low mortgage rates present a significant opportunity for buyers. Zillow economists offered guidance for navigating this competitive environment, emphasizing the importance of pre-approval and good credit scores. The report highlighted the risks of overpaying in bidding wars and urged buyers to set budgets and prioritize needs. Zillow connects users with local agents to streamline home buying and offers direct home buying and mortgage services.
Zillow Group (NASDAQ: Z, ZG) will release its third quarter 2020 financial results on November 5, 2020, after market close. A conference call and webcast to discuss these results will take place at 2 p.m. PT / 5 p.m. ET. Investors can access information, including the live call registration, through the company's Investor Relations website. Zillow Group offers various real estate services, enhancing the home buying and selling experience.
Zillow has launched four tiered Rent Connect marketing packages, simplifying multifamily advertising nationwide. Following a successful pilot, these packages eliminate the complexity of multiple solutions, offering multifamily professionals enhanced control and exposure. The packages include crucial market insights and access to Zillow's popular rental network. Enhanced solutions provide tools for evaluating marketing effectiveness, with the 3D Home tours increasing visitor engagement by 20%. The new offerings aim to bolster visibility for properties during challenging economic conditions.
In September 2020, U.S. home sales accelerated, with homes going under contract in just over 16 days, a significant improvement of 44% year-over-year. Entry-level homes were the fastest sellers, averaging 14 days on the market. Despite lower inventory levels, demand remains strong, with 12% of buyers willing to purchase sight-unseen. High-end homes, however, are taking longer to sell, averaging 33 days. Analysts suggest that the fall market resembles typical spring activity, posing questions about future trends amidst low mortgage rates and ongoing economic uncertainty.
The latest Zillow Real Estate Market Report reveals a robust recovery in the housing market, with the typical home value rising to $259,906 in September, marking a 5.8% annual increase. This report highlights significant growth metrics, including a 0.8% month-over-month rise, the largest since November 2005, and a 2.2% quarterly increase, the highest since 2013. Zillow forecasts a 7% growth in home values for the upcoming year due to heightened demand and limited inventory, which has caused intense bidding wars among buyers.