Zillow Group IR Blog

August 2018 Real Estate Market Report

Rents Flat Year-Over-Year for First Time Since 2012

 

For the first time in six years, U.S. median rent remained at the same level it was a year earlier — at $1,440 for August.

Annual rent appreciation has slowed for six straight months and remained below 3 percent for the past 27 months. It reached peak growth of 6.6 percent in July 2015.

The median rent fell on an annual basis in 19 of the 35 largest markets. Among those metros, rent declined the most in Portland, Ore., where median rent fell 1.8 percent from a year earlier to $1,834. The typical rent is growing fastest in Riverside, Calif., where it rose 3.7 percent over the past year to $1,899.

Among the largest 250 metro areas, 25 posted annual rent declines of 5 percent or more – and 19 of those are smaller metro areas not in the top 100. All but two of those 25 metros – Cape Cod, Mass., and Atlantic City, N.J. – had median rents below the national median.

The largest annual rent drops among the top 250 metros were 13.3 percent in Janesville, Wisc., where median rent in August was $792; 9.4 percent in the Quad Cities of Davenport and Bettendorf, Iowa, and Moline and Rock Island, Illinois, where median rent fell to $949; and 9.2 percent in Cape Cod, Mass., which posted median rent in August of $1,800.

The greatest annual rent increases among the top 250 metro areas were 11.1 percent in Jackson, Miss., where median rent was $1,010 in August; 9 percent in Santa Rose, Calif., where median rent rose to $2,898; and 8.8 percent in Lake Havasu City-Kingman, Ariz., where median rent reached $1,239.

How fast are home values growing?

Home value appreciation also slowed in August, to its slowest pace in two years.

Nationally, home values rose 6.5 percent over the past year to a median value of $216,700, well below the post-crash peak annual appreciation rate of 8.2 percent in March 2018.

San Jose, Calif., logged the fastest annual home value appreciation among the largest 35 metros, up 22.7 percent to $1.3 million. Las Vegas and Atlanta are the only other two top-35 markets where home values grew at a double-digit pace – Las Vegas rising 12 percent to a median of $263,300, and Atlanta climbing 10.4 percent to $204,600.

San Jose also led the largest 250 metro areas. Four of the next five gainers have median home values below the national median. They are Lake Charles, La., where the median home value rose 16.2 percent to $151,800; Daphne, Ala., and East Stroudsburg, Penn., each up 12.9 percent, East Stroudsburg to $149,100 and Daphne to $208,000; and Terre Haute, Ind., where the median home value gained 12 percent to $83,100. Las Vegas, which is also a top-35 metro, tied with Terre Haute with 12 percent annual growth.

Only six of the top 250 metros posted median home value declines. Following a surge last summer, the median home value in Longview, Texas, dropped a whopping 10.4 percent to $133,900 and is now where it was in late 2016. A distant second was Houma, La., where it dropped a more modest 3.6 percent to $132,200.

Inventory decline also slowed

In August, there were 3.6 percent fewer homes for sale than the year before. The lack of available homes has been a defining characteristic of the housing market for several years, but this trend is easing. Inventory has fallen on an annual basis for 43 consecutive months, but the speed of its decline has slowed substantially. A year ago, inventory was down 13.1 percent from the previous year.

Among the largest U.S. housing markets, the biggest inventory declines are in Pittsburgh, Atlanta and Columbus, where inventory is falling at a double-digit pace.

Inventory posted the biggest gains in the San Jose metro, up nearly 90 percent from a year ago – but the number of homes available on a given day there (1,449) was below any other major metro, including fellow tech hubs like San Francisco (3,875) and Seattle (7,094).

Check out Zillow Research for a closer look at the economy through the lens of the housing market.
July 2018 Real Estate Market Report Zillow Group September 2018 IR Roundup