Tight Inventory & Rapid Price Growth Will Impact Spring Home Sales, Zillow

Seattle, WA, April 22, 2016—Faced with rapidly appreciating home values and a dwindling inventory of homes for sale in the critical entry-level and mid-market home segments, first-time and move-up home buyers—typically the housing market’s bread-and-butter—are likely in store for a tough spring home shopping season.

Nationwide, median home values rose 4.8% year-over-year in March and 1.1% over the course of the first quarter, to a Zillow Home Value Index of $186,200, according to the first quarter Zillow Real Estate Market Report. And while overall U.S. home values continue to grow at a modest (though slowly accelerating) clip, home values are rising the fastest among entry-level and mid-market homes in a large majority of the nation’s biggest housing markets.

A number of factors are driving this growth, and many are positive, including strengthening household formation, continued growth in jobs and wages, and general confidence and optimism in the overall value of homeownership, especially among younger generations. But the likeliest contributor to this rapid growth in the bottom and middle is worrisome: There is a real lack of homes to buy in these segments.

The full report can be found here: http://www.zillow.com/research/inventory-by-tier-march-12226/.