Zillow’s January market report shows steady growth for home values, shortened listing time, and a strong year for home sales. Home values increased in all 50 of the largest metros in the country tracked by Zillow, with its home value index increasing 1.1% from December, but 9.1% year over year. Both home value increases break records for the fastest pace Zillow has recorded. Some metros experienced higher value increases than others, such as Phoenix, which saw a home value increase of 2.1% and San Francisco, where home values inched up 0.4%.
So why is the market so enduringly hot, especially at a time of year (squarely in mid-winter) when the market is generally calmer? In short: An extraordinary number of home buyers, with budgets supercharged by rock-bottom mortgage interest rates, are competing over a limited supply of homes for sale.
These buyers did not materialize just because of the pandemic, though that may have accelerated the home-buying decision for some. Rather, the bulk of this demand is coming from simple demographics: Members of the massive Millennial generation are now entering their 30s, when folks — pandemic or not — typically buy their first home. The number of Americans aged 25-34 was 12% higher in July 2020 than July 2010, according to Census estimates, rising from 41.2 million a decade ago to 46.1 million by last summer.
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