Get ready to move if you have a house on the market. According to the June Zillow Real Estate Market report, homes are selling an average of a week faster than they did a year ago.
Tight inventory continues to be a major factor for home shoppers. The supply of homes for sale is nearly 5 percent lower than it was a year ago, and 38 percent lower than its peak level in 2011. With fewer available options, home shoppers are moving quickly to buy homes, with the average U.S. home closing after 78 days on the market.
The 78-day average includes the time it takes to close, which is usually one or two months after the home goes under contract. This means that homes are pending within about a month of being listed.
The length of time homes stay on the market before selling has been steadily decreasing since 2010, when homes took an average of five months to sell. The average time home buyers had in Pittsburgh, Philadelphia and Charlotte, N.C. dropped by at least two weeks, the biggest change among the largest U.S. metros. In the Dallas-Fort Worth market, the average time home buyers had to sell a home was 56 days, down six days from a year earlier.
“Homes are selling faster than ever as the home shopping season hits its peak,” said Zillow Chief Economist Dr. Svenja Gudell. “If you’re looking for a home, be prepared to move quickly. Adding to this difficult buying environment is low inventory – there simply aren’t many homes to choose from. And while this looks like a good time to be a seller, potential move-up buyers may hesitate to list their homes and become buyers. Until the supply increases, it will remain a tough market to find a home.”
The low inventory and quick-moving market combine to create a competitive home shopping market, especially for potential buyers looking for less expensive homes. The most expensive third of the market has experienced the smallest drop in available inventory compared to the rest of the market.
The limited supply of homes is driving home values higher. The average U.S. home is worth $187,000, a 5.4 percent increase from June 2015. Home values have been increasing at 5 percent or faster on an annual basis for the past eight months.
Rents are growing at the slowest pace in nearly two years, up 2.6 percent to a Zillow Rent Index of $1,409.