Limited housing supply is already pushing price growth up, according to a recent Zillow market report, as monthly home value appreciation accelerated for the first time since July.
In addition to not wanting to enter such a tight market as a buyer, homeowners could be hesitant to list their houses and move due to a resurgence in COVID cases and employers’ rising uncertainty about post-pandemic working arrangements, according to a recent Zillow survey.
“Home shoppers picked the shelves clean this December, leaving fewer active listings than ever before in the U.S. housing market,” Zillow Senior Economist Jeff Tucker said in a release. “Enough determined buyers kept up their house hunt to reignite monthly price appreciation. Rising mortgage rates could be the next potential headwind, but demand has proven persistent; neither high prices nor slim inventories have deterred buyers so far.”
The typical home value is now $320,662, 19.6 percent above that of December 2020, according to Zillow. The annual growth rate represents an all-time high dating back more than 20 years.
The resurgent upward pressure on prices is likely due to extremely low levels of inventory. Housing inventory in December plunged 11.1 percent in a month to a new record low of about 923,000 homes. December home shoppers already had 19.5 percent fewer homes to choose from than they did a year before. Compared to December 2019, there are now 40.5 percent fewer homes available for sale.
The rise of the omicron variant of coronavirus could be partially responsible for the inventory drop, pushing homeowners to wait for infection rates to subside before listing, according to Zillow.
Workers are also less certain about their long-term working arrangements, which could impact their plans to move. A December survey conducted by Zillow found that 52 percent of workers reported that their employer had announced post-pandemic work arrangements — a lower share than in June 2021. The rise of new coronavirus variants may have caused employers to push back in-person start dates indefinitely.