Recession may be looming, but housing market remains solid: Zillow
If a recession is looming, the housing market won't be to blame this time, according to Zillow.
Despite unwelcome news of an inverted yield curve in the bond market, mortgage borrowers are behaving better as delinquencies achieve new lows, and lower mortgage rates are helping soften financial burdens for homebuyers. At the same time, property values tracked by Zillow are seeing the slowest appreciation rate since October 2015, which also could help ease affordability concerns.
At $229,000, July's average home price was up 5.2% from a year ago.
"As talk builds of a potential recession in the next year or two, housing remains fairly stalwart. The slowing appreciation is ultimately a good sign that the market is adjusting in response to the growing unaffordability of down payments, while low mortgage rates are keeping those with the required savings interested despite softer growth out the gate," Skylar Olsen, Zillow's director of economic research, said in a press release.
"The uptick in the rate of homes coming onto the market — a good and true increase in supply — should be a boon to those inventory-starved homebuyers still searching near the close of home shopping season. While buyers are catching a break, renters have seen prices continue their steady upward climb, presenting yet another obstacle in the quest to save for that down payment."
Rents increased 1.9% in July from the previous year to $1,592 per month. Rent in Phoenix saw the strongest increase for the eighth straight month, jumping 6.1%. In terms of house price appreciation, values grew most in Salt Lake City (up 9.4%).
Housing inventory increased 1.3% in July from a year ago, reversing four consecutive months of declines, according to Zillow.