Housing inventory saw significant recovery for the second straight month in June, which indicates the market may be on the road to rebalancing after a long period heavily in sellers’ favor, according to a recent Zillow Real Estate Market Report. However, inventory is still low and demand is still strong, sending home value appreciation to record highs for monthly and annual growth.
In April, inventory fell to a low of 33 percent below April 2020. But it has begun to recover, with a 3.9 percent increase in May and a 3.1 percent increase in June. Inventory stands at 29.2 percent below 2020 levels. Inventory growth still has a way to go before it balances out the market, however, as demand pushed appreciation up again in June. Home value appreciation broke annual records for the second month in a row, hitting 15 percent growth year-over-year, the highest in Zillow data going back to 1996. The Zillow Home Value Index reached $293,349, up $38,341 year-over-year.
National home value growth continued to accelerate month-over-month from a revised 1.8 percent in May to 2 percent in June, a new record high. That’s above the pre-pandemic high of 1 percent, set in the summer of 2005.
Zillow economists forecast home values to increase by 13.2 percent by June 2022, a downward revision from the May forecast. June’s forecast calls for 6.02 million home sales in 2021, a 6.6 percent increase year-over-year.