Could the Fall Season Bring a Cooler Housing Market?

August welcomed slower housing price growth and increase in inventory, prepping the cooler fall season for a cooler housing market. Zillow’s August 2021 market report found the typical cost of a home in the U.S. increased from $298,061 in July to $303,288 in August, a slight dip in growth rates compared to June to July. Still, August’s monthly growth rate of 1.75% makes Zillow’s list of some of the fastest home value growth in 20 years. Home prices continue up across the country, but the slight drop in growth rates was also seen nationwide.

Monthly home value growth was still positive nationwide and in all 50 of the country’s largest markets, but the monthly slowdown was widespread, with 43 of the 50 largest major metros seeing appreciation cool between July and August, compared to only 20 from June to July. The largest drop-offs were in Buffalo, San Diego and San Francisco. 

But while month-over-month appreciation is coming back to earth, annual U.S. home value appreciation continues to set records, up 17.7% year over year, more than $45,000 above where they were last August. Among the nation’s largest markets, annual appreciation was fastest in August in Austin (44.8%), Phoenix (31.8%), Salt Lake City (27.9%) and San Diego (26.9%). 

Available housing inventory continued its upward trajectory for the fourth straight month, rising 4.1% over July but remaining down 22.7% from the same time a year ago. For-sale listings rose the most month-over-month in Detroit, Oklahoma City and Buffalo. And the annual declines in inventory are not universal — Austin and Washington D.C. had more available inventory this August than they did one year ago. 

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