HOUSING MARKET OVERVIEW 2018 Q2 · 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 $100K $110K $120K $130K $140K $150K $160K $170K $180K $190K $200K $210K $220K Zillow Home Value

HOUSING MARKET OVERVIEW 2018 Q2Zillow Economic Research

ZILLOW HOUSING MARKET OVERVIEW | PAGE 1

Table of Contents ��1Zillow Economic Research �� 4Zillow Group ��7HOME VALUES AND RENTS �� 8

Zillow Home Value Index ��9

Zillow Home Value Index, Annual and Monthly Growth ��10

Annual Home Value Growth �� 11

Zillow Home Value Forecast �� 12

Zillow Home Value Index, by Thirds �� 13

Annual Home Value Appreciation, by Thirds �� 14

Zillow Rent Index �� 15

Annual Rent Appreciation �� 16

Multifamily and Single-Family Home Rents �� 17

Zillow Rent Forecast �� 18

HOUSING AFFORDABILITY ��19Zillow Mortgage and Rent Affordability ��20

Mortgage Affordability by Metro �� 21

Zillow Mortgage Affordability, by Thirds �� 22

Rent Affordability by Metro �� 23

Table of Contents


Household Income, by Thirds �� 24

Housing Affordability Table �� 25

INVENTORY, CONSTRUCTION AND DEMOGRAPHICS ��26Zillow For-Sale Inventory �� 27

Zillow For-Sale Inventory, by Thirds �� 28

New Homes Listed For Sale �� 29

Days on Zillow ��30

Home Sales �� 31

New Residential Construction Permits �� 32

Age of Sold Homes �� 33

Home Sale Prices ��34

Home and Lot Sizes �� 35

Typical Buyer Profile �� 36

Single-Family Residence Rentals �� 37

Homeownership Views by Age �� 38

Share of Millennials Living With Their Parents �� 39

Comparing First-Time and Repeat Buyers ��40

NEW IN Q2 ��41U�S� Homeownership Rate ��42

Homeownership Rate by Race ��43

Rental Listing Affordability ��44


Newly Formed Households �� 45

Home Values in Redlined Areas �� 46

Fertility and Housing�� 47

The Tax Cuts and Jobs Act �� 48

The Evolving American Dream �� 49

About Zillow �� 53


Zillow Economic Research

Dr� Svenja Gudell, Chief Economist @SvenjaGudell

Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Under Svenja’s leadership, Zillow produces monthly reports on housing trends for more than 450 metros nationwide, with data often available down to the ZIP-code level� In addition, Svenja and her team publish original research on various real estate topics, ranging from rental and mortgage affordability, negative equity and forecasting, to policy, generational and mortgage research� Svenja has presented to various federal agencies and at numerous industry conferences, and has been widely quoted in national and local media�

Prior to joining Zillow, Svenja did economic, financial and strategy consulting for Analysis Group and was an Assistant Economist in the Research Group of the Federal Reserve Bank of New York� Svenja has a Bachelor of Arts in economics from the University of Rochester, a Master of Arts in economics from New York University, a Master of Science in business administration from the University of Rochester, and a Ph�D� in finance from the University of Rochester� Contact Svenja at svenjag@zillow�com



Dr� Skylar Olsen, Senior Economist

Skylar joined Zillow in the summer of 2012� Her research is used by consumers, policy makers, and other researchers to understand the real estate markets and make better decisions� While authoring numerous research projects such as A House Divided – How Race Colors the Path to Homeownership, she also creates many of Zillow’s real estate metrics, including the Buyer-Seller Index and the Buy-Rent Breakeven Horizon� She holds a Ph�D� in Economics from the University of Washington and specializes in the spatial patterns of housing and demographic change�

Aaron Terrazas, Senior Economist@AaronTerraz

Aaron is a Senior Economist at Zillow where his research focuses primarily on mortgage and rental markets� Previously he was an economist at the United States Treasury Department’s Office of Economic Policy, and a policy analyst at the Migration Policy Institute in Washington, D�C� He received his bachelor’s degree in international relations from Georgetown University and his master’s degree in applied economics from Johns Hopkins University�



Sarah Mikhitarian, Economist

Sarah joined Zillow in October 2015, working on unveiling current real estate market conditions, interesting patterns in the housing market and past and future market trends� Prior to joining Zillow, Sarah worked at the Institute for Health Metrics and Evaluation, where she conducted research aimed at understanding and improving national and global health and evaluating the performance of health systems� She received her undergraduate degree in both economics and Hispanic studies from Scripps College, and was awarded a Master of Arts in economics with a specialization in applied microeconometrics from the University of Washington�

Alexander Casey, Policy Advisor

Alexander joined Zillow as a policy analyst in the summer of 2016� He works on the Economic Research team, using Zillow’s research to contribute to current public policy concerning housing and the overall economy� Alexander is involved with a variety of policy issues including housing assistance, land use, finance and transportation� Prior to joining Zillow, Alexander worked at the Minnesota Attorney General’s Office on consumer protection issues� Alexander holds an M�P�A� from the Evans School of Public Policy and Governance at the University of Washington, and a B�A� in Sociology from the University of Minnesota�


Zillow Group

Dr� Stan Humphries, Chief Analytics Officer@StanHumphries

Dr� Stan Humphries is the chief analytics officer of Zillow Group, a portfolio of the largest and most vibrant real estate and home-related brands on Web and mobile� Stan is the co-author of the New York Times Best Seller “Zillow Talk: Rewriting the Rules of Real Estate�”

As chief analytics officer, Stan oversees Zillow Group financial planning and analysis, corporate strategy, economic research, data science and engineering, marketing and business analytics, and pricing analytics� Stan was one of Zillow’s earliest pre-launch employees and is the creator of the Zestimate and its first algorithm�

Stan also serves as chief economist for Zillow Group� He has built out the industry-leading economics and analytics team at Zillow, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Stan is a member of Fannie Mae’s Affordable Housing Advisory Council and the Commerce Department’s Data Advisory Council� Stan also serves on the Visiting Committee of the Department of Economics at the University of Washington�

Prior to joining Zillow, Stan spent five years at Expedia, where he ran the advanced analytics team� Before Expedia, Stan served as a researcher and faculty member at the University of Virginia, and was previously a Presidential Management Fellow where he served at NASA, the Office of Science and Technology Policy in the Executive Office of the President, and the Technology Administration within the Department of Commerce� Stan has also served in the United States Peace Corps, where he taught high school physics and chemistry in the West African country of Benin� Stan has a Bachelor of Arts from Davidson College, a Master of Science in foreign service from Georgetown University and a Ph�D� in government from the University of Virginia�


HOME VALUES AND RENTS

• U�S� home values are growing at a steady pace, and have surpassed pre-recession highs nationally and in a number of large markets� Driven largely by limited inventory and high demand, home values are growing fastest at the bottom end of the market�

• Regionally, markets in the Pacific Northwest, Texas, Florida and parts of the Southwest continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�

• Growth in U�S� rents has slowed considerably over the past couple of years and has largely stabilized� Pockets of strong rent appreciation remain in the Pacific Northwest and California�


2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

$100K

$110K

$120K

$130K

$140K

$150K

$160K

$170K

$180K

$190K

$200K

$210K

$220K

Zill

ow

Ho

me

Val

ue In

dex

$217,300

May 2007$200,500

February 2012$148,600

U�S� home values have surpassed pre-recession highs�

Source: Zillow Home Value Index (June 2018)�

+46.2% +8.3%Trough-to-Current Year-over-Year

Zillow Home Value Index


1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Yea

r-o

ver-

Yea

r C

hang

e in

ZH

VI

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

Mo

nth-

ove

r-M

ont

h C

hang

e in

ZH

VI8.3%

0.5%

Annual Home Value Growth Monthly Home Value Growth

The pace of annual U�S� home value growth has accelerated over the past few years�


Zillow Home Value Index, Annual and Monthly Growth


Washington, DC4.2%

Tampa, FL10.9%

Seattle, WA11.4%

Sacramento, CA6.4%

Pittsburgh, PA7.9%

Phoenix, AZ8.0%

Philadelphia, PA5.9%

Orlando, FL9.7%

New York, NY6.7%

Los Angeles, CA7.6%

Kansas City, MO9.2%

Houston, TX5.8%

Detroit, MI9.7%

Columbus, OH9.1%

Boston, MA7.2%

Austin, TX5.7%

San Francisco, CA11.0%

Minneapolis, MN7.6%

Las Vegas, NV15.0%

San Diego, CA6.6%

Cincinnati, OH6.6%St. Louis, MO

5.5%

Portland, OR5.9%

Atlanta, GA11.6%

Denver, CO7.4%

Chicago, IL5.8%

Dallas, TX11.6%

Miami, FL7.7%4.2% 15.0%

Annual Home Value Growth

Markets in the Pacific Northwest, Texas and Florida continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�


Annual Home Value Growth


0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13%Expected Home Value Appreciation Through June 2019

Los Angeles, CA

Detroit, MI

Boston, MA

Dallas, TX

San Francisco, CA

Tampa, FL

Seattle, WA

Chicago, IL

Atlanta, GA

New York, NY

Philadelphia, PA

United States

Minneapolis, MN

Miami, FL

St. Louis, MO

Baltimore, MD

San Diego, CA

Washington, DC

Phoenix, AZ

Riverside, CA

Houston, TX 1.5%1.7%

3.7%3.8%

4.7%4.8%4.9%

5.4%6.1%

6.6%6.8%6.9%7.1%7.1%

7.5%7.5%

7.8%8.1%

9.0%12.1%

6.6%

Home value growth is expected to slow over the next 12 months�

Source: Zillow Home Value Forecast, Top 20 Metros (June 2018)�

Zillow Home Value Forecast


1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

$400K

Zill

ow

Ho

me

Val

ue In

dex

$380,100

$217,300

$123,200

Bottom Third Median Home Value Top Third

Zillow Home Value Index, by Thirds


Year-over-Year % Change

11.7% 8.3% 5.1%Bottom Third Median Top Third

Homes valued in the bottom-third of the market are growing in value the fastest�


1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Ann

ual H

om

e V

alue

Gro

wth

5.1%

11.7%

8.3%

Bottom Third Median Home Value Top Third

Annual Home Value Appreciation, by Thirds


Home value appreciation among homes valued in the bottom third has slowed somewhat, but the annual pace of growth is still more than double that of top-third homes�


2011 2012 2013 2014 2015 2016 2017 2018

$1,240

$1,260

$1,280

$1,300

$1,320

$1,340

$1,360

$1,380

$1,400

$1,420

$1,440

Zill

ow

Ren

t In

dex

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Yea

r-O

ver-

Yea

r C

hang

e in

Zill

ow

Ren

t In

dex

$1,440

1.3%

Zillow Rent Index Annual Rent Growth

Annual growth in rents has slowed since the beginning of 2018�

Source: Zillow Rent Index (June 2018)�

Zillow Rent Index


Washington, DC0.6%

Tampa, FL2.7%

Seattle, WA1.9%

San Jose, CA1.2%

Sacramento, CA5.4%

Pittsburgh, PA0.8%

Phoenix, AZ2.9%

Philadelphia, PA0.2%

Orlando, FL3.3%

New York, NY0.5%

Los Angeles, CA2.8%

Las Vegas, NV4.1%

Kansas City, MO-0.3%

Houston, TX0.9%

Detroit, MI3.1%

Denver, CO2.1%

Columbus, OH2.4%

Boston, MA0.5%

Austin, TX-0.9%

St. Louis, MO0.0%San Francisco, CA

1.1%

San Diego, CA2.0%

Minneapolis, MN2.6%

Miami, FL0.8%

Dallas, TX0.6%

Cincinnati, OH1.4%

Chicago, IL0.0%

Charlotte, NC2.5%

Atlanta, GA3.6%

-0.9% 5.4%

Annual Rent Growth

The annual pace of rent growth is largely sustainable in most large markets�


Annual Rent Appreciation


2012 2014 2016 2018

$1,250

$1,300

$1,350

$1,400

$1,450

$1,500

$1,550

Zill

ow

Ren

t In

dex

$1,416

$1,556

2012 2013 2014 2015 2016 2017 2018-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Yo

Y

1.2%

0.7%

Multifamily Units Single-Family Homes

Rents for single-family homes and units in larger multifamily buildings share similar trends�


Multifamily and Single-Family Home Rents


-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%Expected Rent Appreciation Through June 2019

Riverside, CA

Tampa, FL

Boston, MA

Minneapolis, MN

Los Angeles, CA

Atlanta, GA

Seattle, WA

Phoenix, AZ

Miami, FL

San Diego, CA

Baltimore, MD

United States

Dallas, TX

Detroit, MI

Philadelphia, PA

New York, NY

St. Louis, MO

San Francisco, CA

Washington, DC

Houston, TX

Chicago, IL

-0.3%

-0.5%

0.0%

0.4%

0.4%

0.5%

2.4%

2.9%

3.8%

2.8%

2.3%

2.2%

2.2%

0.1%

1.8%

1.3%

1.3%

1.5%

1.2%

2.1%

1.1%

Rental appreciation is expected to remain steady over the next year�

Source: Zillow Rent Forecast (June 2018)�

Zillow Rent Forecast


HOUSING AFFORDABILITY• Overall, mortgage affordability – the share of income necessary to afford

a typical mortgage payment – looks reasonable in most markets� But affordability is suffering, especially at the bottom end of the market, as home values nd interest rates rise and incomes fail to keep pace�

• As mortgage and interest rates rise, some would-be home sellers with lower mortgage interest rates may decide not to sell and instead stay in their current home, choosing not to give up a lower monthly payment� This phenomenon of “mortgage rate lock-in” could end up negatively impacting inventory�

• Unlike mortgage affordability, rental affordability is much worse today than it was historically, though the recent slowdown in rent growth has helped somewhat�

• Poor rent affordability is worrisome, as more money devoted to rent makes it more difficult to save for homeownership�


1988 1993 1998 2003 2008 2013 201812%

14%

16%

18%

20%

22%

24%

26%

28%

30%

24%

22%

20%

28%

18%

Average Share of Income Spent on Rent, 1985-2000

Average Share of Income Spent on Mortgage, 1985-2000

Share of IncomeSpent on Mortgage,

1985-2000

Share of IncomeSpent on Mortgage,

2018 Q2

MortgageAffordability

Forecasted at 5%


Forecasted at 6%


Forecasted at 7%

Share of IncomeSpent on Rent,

1985-2000

Share of IncomeSpent on Rent, 2018

Q2

28%26%24%22%20%18%21%

Share of Income Spent on Housing

Nationwide, the share of income spent on a mortgage is well below historic norms�

Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2018 Q2)�

Zillow Mortgage and Rent Affordability


1994 2014 1994 2014 1994 2014 1994 2014 1994 2014

0%

20%

40%

60%

0%

20%

40%

60%

0%

20%

40%

60%

0%

20%

40%

60%

27.9%

New York, NY

45.0%

Los Angeles, CA

15.6%

Chicago, IL

16.7%

Dallas, TX

16.1%

Philadelphia, PA

15.1%

Houston, TX

19.4%

Washington, DC

24.9%

Miami, FL

15.2%

Atlanta, GA

25.8%

Boston, MA

44.9%

San Francisco, CA

12.9%

Detroit, MI

28.3%

Riverside, CA

20.2%

Phoenix, AZ

28.6%

Seattle, WA

16.7%

Minneapolis, MN

37.9%

San Diego, CA

12.6%

St. Louis, MO

18.7%

Tampa, FL

16.0%

Baltimore, MD

Sha

re o

f In

com

e S

pen

t o

n M

ort

gag

e

Mortgage A�ordabilityAverage A�ordability, 1985-2000

Source: Zillow Mortgage Affordability (2018 Q2)�

Mortgage Affordability by MetroIn some coastal markets that have seem rapid home value appreciation, share of income spent on a mortgage has surpassed historic norms�


Weak income growth and rapid appreciation, even with very low mortgage interest rates, means homes are becoming more unaffordable, more quickly for buyers of homes valued in the bottom third�

Source: Zillow Mortgage Affordability (2018 Q2)�

Zillow Mortgage Affordability, by Thirds

2000 2002 2004 2006 2008 2010 2012 2014 2016 20180.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Sha

re o

f In

com

e S

pen

t o

n M

ort

gag

e

12.9%

15.4%

23.9%

Bottom Third Middle Third Top Third


1994 2014 1994 2014 1994 2014 1994 2014 1994 2014

0%

20%

40%

60%

0%

20%

40%

60%

0%

20%

40%

60%

0%

20%

40%

60%

37.7%

New York, NY

46.9%

Los Angeles, CA

28.3%

Chicago, IL

28.4%

Dallas, TX

27.1%

Philadelphia, PA

28.8%

Houston, TX

25.4%

Washington, DC

41.5%

Miami, FL

25.4%

Atlanta, GA

32.7%

Boston, MA

39.2%

San Francisco, CA

24.4%

Detroit, MI

36.8%

Riverside, CA

26.4%

Phoenix, AZ

30.9%

Seattle, WA

25.5%

Minneapolis, MN

40.3%

San Diego, CA

21.8%

St. Louis, MO

31.0%

Tampa, FL

25.6%

Baltimore, MD

Sha

re o

f In

com

e S

pen

t o

n R

ent

Rent A�ordabilityAverage A�ordability, 1985-2000

Rent Affordability by Metro

Source: Zillow Rent Affordability (2018 Q2)�

The share of income spent on rent is higher than the historic average in all but one of the nation’s 20 largest metros�


2000 2002 2004 2006 2008 2010 2012 2014 2016 2018$0K

$10K

$20K

$30K

$40K

$50K

$60K

$70K

$80K

$90K

$100K

$110K

$120K

$130K

Ho

useh

old

Inco

me

$59,049

$20,960

$126,717

Income growth for the lowest earners has been especially weak�

Source: Zillow analysis of U�S� Census Bureau ACS data, IPUMS (2017 Q2)�

Nominal Income Growth,

2000-2016

50.5%Top Third

35.2%Middle Third

30.5%Bottom Third

Household Income, by Thirds

ZILLOW HOUSING MARKET OVERVIEW | PAGE 25Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2018 Q2)�

Housing Affordability Table

Region Name Median Income

Mortgage Affordability,

2018 Q2

Historic Mortgage

Affordability, 1985-2000

Forecast Mortgage

Affordability (5% Interest

Rate)

Forecast Mortgage


Rate)

Forecast Mortgage


Rate)

Rent Affordability,

2018 Q2

Historic Rent Affordability

1985-2000

United States $60,748 17�5% 21�2% 19�6% 21�9% 24�3% 28�4% 25�8%

New York, NY $75,508 27�9% 29�2% 31�3% 35�0% 38�8% 37�7% 26�3%

Los Angeles, CA $70,373 45�0% 34�6% 53�1% 59�3% 65�8% 46�9% 36�3%

Chicago, IL $69,333 15�6% 23�1% 17�5% 19�6% 21�7% 28�3% 25�3%

Dallas, TX $67,348 16�7% 22�9% 18�9% 21�1% 23�5% 28�4% 21�8%

Philadelphia, PA $69,336 16�1% 20�4% 18�1% 20�2% 22�4% 27�1% 21�4%

Houston, TX $64,575 15�1% 21�1% 16�1% 18�0% 19�9% 28�8% 24�4%

Washington, DC $100,739 19�4% 22�3% 21�2% 23�7% 26�3% 25�4% 17�7%

Miami, FL $53,775 24�9% 20�3% 27�6% 30�8% 34�2% 41�5% 28�6%

Atlanta, GA $65,950 15�2% 18�3% 17�1% 19�1% 21�2% 25�4% 19�3%

Boston, MA $86,622 25�8% 26�3% 29�3% 32�7% 36�3% 32�7% 26�4%

San Francisco, CA $104,172 44�9% 38�5% 50�7% 56�6% 62�9% 39�2% 30�6%

Detroit, MI $58,826 12�9% 16�0% 14�8% 16�5% 18�3% 24�4% 20�0%

Riverside, CA $61,860 28�3% 27�9% 30�2% 33�8% 37�5% 36�8% 32�7%

Phoenix, AZ $61,975 20�2% 21�1% 22�0% 24�5% 27�2% 26�4% 22�8%

Seattle, WA $84,369 28�6% 25�9% 32�2% 36�0% 39�9% 30�9% 23�8%

Minneapolis, MN $76,931 16�7% 17�8% 18�6% 20�7% 23�0% 25�5% 21�2%

San Diego, CA $75,597 37�9% 33�5% 41�7% 46�5% 51�6% 40�3% 34�7%

St� Louis, MO $62,753 12�6% 17�0% 13�9% 15�5% 17�2% 21�8% 21�2%

Tampa, FL $53,782 18�7% 18�8% 21�1% 23�5% 26�1% 31�0% 27�6%

Baltimore, MD $81,411 16�0% 21�6% 17�6% 19�6% 21�8% 25�6% 27�0%


INVENTORY, CONSTRUCTION AND DEMOGRAPHICS

• Inventory of homes for sale is very low, and getting lower� Inventory constraints are particularly acute among entry-level and median homes – the exact homes sought by first-time homebuyers and young families�

• New construction has thus far failed to get back to pre-recession levels, especially for single-family homes�

• Homes that are on the market are selling faster – currently, homes spend ten days less on the market before selling than they did a year ago�

• Millennials do value homeownership, but many are finding it difficult to attain, and more young adults are living with their parents�


2010 2011 2012 2013 2014 2015 2016 2017 2018

1200K

1300K

1400K

1500K

1600K

1700K

1800K

1900K

2000K

2100K

2200K

2300K

Fo

r-S

ale

Inve

nto

ry

1,206,747

The number of U�S� homes for sale is low, and falling

Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (June 2018)�

-48.0% -4.8%Peak-to-Current Year-over-Year

Zillow For-Sale Inventory


2010 2011 2012 2013 2014 2015 2016 2017 20180K

100K

200K

300K

400K

500K

600K

700K

800K

900K

Sm

oo

thed

Sea

sona

lly A

dju

sted

Inve

nto

ry

546,627

304,181

234,243

Bottom Third Middle Third Top Third

Inventory shortages are particularly acute among bottom- and middle-third homes�

Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (June 2018)�

-3.6% -2.9% -5.4%Bottom Third Middle Third Top Third

Year-over-Year % Change

Zillow For-Sale Inventory, by Thirds


2012 2013 2014 2015 2016 20170K

100K

200K

300K

400K

500K

600K

700K

561,740

470,155

New Listing CountNew Listing Count (Trailing Twelve Month Average)

The number of listings hitting the market has remained consistent

Source: Zillow Listing Data (June 2017)�

New Homes Listed For Sale


2010 2011 2012 2013 2014 2015 2016 2017 2018

70

80

90

100

110

120

130

140

Day

s o

n Z

illo

w

66

Homes listed for sale are selling more quickly than in the past few years�

Source: Zillow Days on Zillow, Including REOs (June 2018)�

Days on Zillow


2002 2004 2006 2008 2010 2012 2014 2016 20180.0M

1.0M

2.0M

3.0M

4.0M

5.0M

6.0M

7.0M

Exi

stin

g H

om

e S

ales

0K

200K

400K

600K

800K

1,000K

1,200K

1,400K

New

Ho

me

Sal

es

5.4M

631K

Existing Home Sales New Home Sales

Sales of existing homes largely plateaued in the first half of 2018, while new home sales continue to climb in fits and starts�

Source: National Association of Realtors Existing Home Sales: Single-Family & Condo & Co-op, U�S� Census Bureau New Residential Sales (June 2018)�

Home Sales


2001 2003 2005 2007 2009 2011 2013 2015 2017 20190K

200K

400K

600K

800K

1,000K

1,200K

1,400K

1,600K

1,800K

New

Pri

vate

Ho

usin

g U

nits

Aut

hori

zed

by

Bui

ldin

gP

erm

its

(Sea

sona

lly A

dju

sted

Ann

ual R

ates

)

853K

403K

In structures with 1 unit In structures with 5+ units

Permits for new multifamily projects are near pre-recession levels, while single-family permits remain low�

Source: U�S� Census Bureau: New Residential Construction (June 2018)�

New Residential Construction Permits


2000 2002 2004 2006 2008 2010 2012 2014 20160

3

6

9

12

15

18

21

24

27

30

Med

ian

Ag

e o

f S

old

Ho

mes

2006: 15 years

2015: 28 years

The age of sold homes has almost doubled since the housing collapse, largely because of a lack of new construction�

Source: Zillow analysis of public record transactions, 2015�

Age of Sold Homes


2001 2003 2005 2007 2009 2011 2013 2015 2017 2019$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

Sal

e P

rice

$258,031

$304,355

Existing Homes New Homes

The price gap between newly built and and existing homes has widened over the past decade�

Source: National Association of Realtors and U�S� Census Bureau Construction Review (June 2018)�

Home Sale Prices


2000 2002 2004 2006 2008 2010 2012 2014 2016-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Per

cent

Cha

nge

in M

edia

n H

om

e S

ize

and

Med

ian

-13.1%

20.2%

Note: Centered 7-month moving average

Lot Square Feet Structure Square Feet

Since 1999, homes have gotten larger while lots have gotten smaller�

Source: Zillow analysis of U�S� Census Bureau: Survey of Construction microdata, 2000-2016�

Home and Lot Sizes


Typical Buyer Profile

Source: Zillow analysis of U�S� Census Bureau, American Community Survey, 2014, made available by the University of Minnesota, IPUMS-USA�

Existing Homes New Construction

$95KIncome

25 minutesTypical Commute Time

75.5% marriedMarital Status

46.1%Have At Least One Child

26.2%Millennial Share

$70KIncome

56.6% marriedMarital Status

40%Have At Least One Child

30%Millennial Share

20 minutesTypical Commute Time


1982 1987 1992 1997 2002 2007 2012 2017

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19.0%

Sha

re o

f S

FR

s T

hat

Are

Ren

ted

18.9%

Renting single-family homes is increasingly popular�

Source: Zillow analysis of U�S� Census Bureau, Current Population Survey 2017, made available by University of Minnesota, IPUMS-USA�

Single-Family Residence Rentals


Owning a home is necessary tolive the American Dream

Owning a homeincreases your standingin the local community

Owning a home is a key to ahigher social status

18-34 35-54 55+ 18-34 35-54 55+ 18-34 35-54 55+0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

63.0% 62.0%67.0%

74.0%

67.0%71.0% 69.0%

66.0%

58.0%

Age Group

Millennials do have positive views of homeownership�

Source: Zillow Housing Aspirations Report (March 2018)�

Homeownership Views by Age


The share of millennials (age 18-34) living with their parents has increased sharply in the past decade�

Source: Zillow analysis of U�S� Census, American Community Survey, 2005-2016, made available by the University of Minnesota, IPUMS-USA�

Share of Millennials Living With Their Parents


1975-1979 2010-2013

32.5 years oldAverage age

$54KIncome in today’s dollars

2 people Household size

6 years Years renting before buying

$140KHome value in today’s dollars

29 years oldAverage age

2.6 people Household size

4.6 years Years renting before buying

$99KHome value in today’s dollars

$55KIncome in today’s dollars

Comparing First-Time and Repeat Buyers

Source: Zillow analysis of University of Michigan Panel Survey of Income Dynamics, 1970-2013�

Today’s first-time home buyer is more than three years older and typically rents longer before making the jump into homeownership compared to previous generations�


NEW IN Q2

• The homeownership rate is at multi-decade lows, as renters stay renting longer and would-be buyers find it difficult to enter the market�

• Birth rates have fallen in markets that have experienced the most home value growth�

• A greater share of rentals are out of reach for black and hispanic households compared to white and Asian households�

• The single-family home in the suburbs remains a mainstream standard of what homeownership should look like but the image of the ideal American home is beginning to evolve, if only slightly� Especially for younger Americans�


1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017

63.0%

64.0%

65.0%

66.0%

67.0%

68.0%

69.0%

U.S

. Ho

meo

wne

rshi

p R

ate

64.3%

The U�S� homeownership rate is near historic lows�

Source: U�S� Census Bureau Homeownership Rate for the United States (2018 Q2)�

U�S� Homeownership Rate


1904 1914 1924 1934 1944 1954 1964 1974 1984 1994 2004 20140%

10%

20%

30%

40%

50%

60%

70%

48.1%45.6%

20.5%

71.3%

40.2%41.0%

10.1%

58.1%

1950 Census DataUnavailable

AsianBlackHispanicWhite

The gap between black and white homeownership rates has widened since 1900

Source: Urban Institute analysis of U�S� Census Bureau, Decennial Census and American Community Survey, 1990-2015, made available by IPUMS-USA, University of Minnesota, www�ipums�org�

Homeownership Rate by Race


All Asian Black Hispanic White0%

10%

20%

30%

40%

50%

60%

70%

Sha

re o

f R

enta

l Lis

ting

s A

ffo

rdab

le t

o H

ous

eho

lds

Sp

end

ing

30

per

cent

or

less

of

The

ir In

com

es o

n R

ent

67.4%

49.7%

27.3%

41.9%

16.2%

Blacks and Hispanics can afford fewer rental listings�

Source: Zillow analysis of Zillow rental listings in 2017 and median household income data from the U�S� Census Bureau, American Community Survey, 2016, projected forward using the Burea of Labor Statistics’ Employment Cost Index�

Rental Listing Affordability


1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Cum

ulat

ive

Per

cent

Cha

nge

in t

he N

umb

er o

f H

ous

eho

lds

31.7%

24.8%

27.2%

% change total % change owner % change renter

Since 2005, newly formed households have tended to rent�

Source: Zillow analysis of U�S� Census Bureau CPS data 1995-2016, IPUMS�

Newly Formed Households


1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019$0K

$100K

$200K

$300K

$400K

$500K

$600K

$276,199

$248,745

$369,841

$640,238

Median home values for areas the government designated best, still desirable, definitely decliningand hazardous for mortgage lending

Home values in the vast majority of neighborhoods that were “redlined” as hazardous for mortgage lending by the federal government 80 years ago are lower now than in areas rated more highly�

Source: Urban Institute analysis of U�S� Census Bureau, Decennial Census and American Community Survey, 1990-2015, made available by IPUMS-USA, University of Minneosta, www�ipums�org�

Home Values in Redlined Areas


2011 2012 2013 2014 2015 201680%

85%

90%

95%

100%

Fer

tilit

y R

ate

for

25-

to 2

9-Y

ear-

Old

Wo

men

Ind

exed

to

2010

86.6%

92.4%

93.6%93.9%94.6%

Birth rates have fallen most in markets that experienced the most home value growth�

Source: Zillow Home Value Index, 2010-2016, and Zillow analysis of age-specific fertility rates from the Centers for Disease Control and Prevention’s National Center for Health Statistics�

Fertility and Housing


Owners

0%5%10%15%20%25%30%

29%

14%

15%

21%

4%

5%

5%

5%

2%

Renters

0% 5% 10% 15% 20% 25% 30%

Savings andinvestment

Paying off debt

Home renovations

Vacation

Car

Appliances orconsumer goods

Entertainment

Housing costs(e.g., buy or rent a

bigger home)

Other

29%

27%

12%

11%

4%

5%

2%

2%

7%

If you were to recieve a 4% raise, how much of this money, if any, would you spend on...?

Americans are likely to reinvest billions in tax savings back into housing�

Source: Zillow Housing Aspirations Report, March 2018

The Tax Cuts and Jobs Act

If you were to receive a 4% raise, how much of this money, if any, would you spend on��?


A clear preference for homeownership

94% 64.3%

of respondents said that if money were no object, they would own their home

U.S. Homeownership Rate, 2018 Q2

Americans have a preference for homeownershiph


The Evolving American Dream


22%15%12%

5%

63%56%52%

57%

33%32%22%

31%

26%of Americans prefer to live in an urban area

56%of Americans prefer to live in a suburban area

18%of Americans prefer to live in a rural area

Whites are more likely than other racial and ethnic

groups to prefer rural areas

All races prefer suburban areas

Hispanics, Asians and blacks prefer urban areas

more than whites do

AsianBlackHispanicWhite

Urban

Suburban

Rural

A majority of Americans prefer to live in the suburbs� This preference holds true across races and ethnicities




82% 7%10%of Americans prefer to live

in a single-family homeof Americans prefer

to live in a townhomeof Americans prefer to live in a condo/co-op

Americans overwhelmingly aspire to own a detached single-family home




39% 32%29%of Americans prefer living close to major highways

of Americans do not want to live near major highways or

public transit

of Americans prefer living close to public transit

The share of people who prefer living close to a highway is almost matched by the share who say they’d prefer not to live near the highway�




About Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals� In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr� Svenja Gudell� Dr� Gudell and her team of economists and data analysts produce extensive housing data and research cover-ing more than 450 markets at Zillow Real Estate Research� Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years� Launched in 2006, Zillow is owned and operated by Zil-low Group, Inc� (NASDAQ:Z and ZG), and headquartered in Seattle�

Zillow is a registered trademark of Zillow, Inc�

Press Contact: press@zillow�com

Documents

HOUSING MARKET OVERVIEW 2018 Q2 · 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 $100K $110K $120K $130K $140K $150K $160K $170K $180K $190K $200K $210K $220K Zillow Home Value