Zillow – Zillow June 2021-June 2022 Home Value & Sales Forecast
- Zillow expects home values to grow 13.2% between June 2021 and June 2022, and to end 2021 up 20.3% from December 2020.
- Existing home sales are expected to total 6.02 million in 2021, up 6.6% from 2020.
Current home value appreciation continues to set new records and is expected to continue to accelerate through the summer. But looking ahead a full year, Zillow expects a slightly more sedate pace of growth than in prior months, as new inventory continues to come online and things settle back into a more familiar pre-covid pattern — which should also serve to boost overall home sales activity in a more balanced market.
Zillow economists expect home values to increase 6.3% over the next quarter (June-September), by 20.3% through the end of this year (December 2020-December 2021) and by 13.2% through the twelve months ending in June 2022. The latest quarterly home value forecast is an upward revision from last month, when we expected 6.1% growth from May-August. But the 12-month forecast has been revised slightly downward from expectations of 14.9% growth between May 2021 and May 2022. The shorter-term forecast continues to be influenced by the current torrid pace of home value growth, but over the longer-term the forecast has been recalibrated to account for a closer return to pre-Covid conditions in the next 7-12 months.
In part because of continued gains in inventory that are likely to give buyers even modestly more choice and help smooth out what is currently a difficult buying environment, our sales forecast for the rest of this year and the first half of next year has strengthened since last month. Zillow expects a total of 6.02 million existing home sales in 2021, up 6.6% from 2020 (on its own the strongest year for existing home sales since 2006) and higher than the 5.91 million total 2021 sales expected in our prior forecast. Recent increases in both pending home sales volume and home purchase mortgage application activity also contributed to our improved 2021 sales outlook.
Despite recent gains, inventory remains incredibly low (especially at lower price points) and the current sellers’ market is unlikely to turn overnight. And rapid home value growth continues to be a hallmark of this market, contributing to mounting housing affordability concerns and an overall challenging environment for buyers. But conditions are nevertheless slowly changing, bringing more balance into the market that is likely to benefit both buyers and sellers. And buyers themselves are proving resilient and resourceful, applying for mortgages and making offers on homes at improving rates — a sign of continued confidence and strength in housing.