Annual U.S. home value growth slowed for the 21st consecutive month in January, according to a new report from Zillow.
The report found home values in January grew 3.8 percent year-over-year to $245,193, less than one-hundredth of a percentage point slower than the previous month.
Zillow said annual home value appreciation has slowed in each month since April 2018, but January was the smallest drop from one month to the next during that period.
“As the economic storm clouds on the horizon in early 2019 cleared up, we saw buyers return in droves, taking advantage of ultra-low mortgage rates,” Zillow Economist Jeff Tucker said in a release. “Our first look at 2020 data suggests that we could see the most competitive home shopping season in years, as buyers are already competing over near-record-low numbers of homes for sale.
“That is likely to mean more multiple-offer situations, and that buyers will have a harder time finding the perfect fit for their families,” Tucker said. “The good news for buyers is that low mortgage rates are helping to make home ownership more affordable, and home builders are responding to the hot housing market by starting construction on more homes than at any time since 2007.”
According to the report, the number of homes listed for sale in January increased from December, but was still down 8 percent year-over-year. Zillow said there were 1.5 million homes on the market in January, up 4,295 from the previous month but down 130,310 from one year ago.
During January, home values grew faster than in December in half of large markets, including Phoenix (up 6.7 percent); Columbus, Ohio (6.2percent); Charlotte, N.C. (5.4 percent); and Cincinnati (5 percent).
Home values in January fell year-over-year in San Jose, Calif., for the 12th consecutive month. But home values in San Francisco increased 1 percent year-over-year, breaking a streak of declines that dated back to May 2019.
Zillow said inventory in January fell in all but three top-35 metros – San Antonio, Texas (+7.7 percent); Detroit (+6.4 percent); and Chicago (+0.3 percent). Inventory in January dipped the most in Seattle (-27.6 percent); Phoenix (-24.5 percent); and San Diego (-23.1 percent).