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Zillow’s October 2021 Market Report

Market Data + Trends

Zillow’s October 2021 Market Report

Why the housing market may finally be cooling off

November 19, 2021
Market data graphic

Low housing inventory and home value appreciation signal a cooling market despite year-over-year highs for the month of October, Zillow reports. Though home values remain high in the 50 largest U.S. metros, home value growth is decelerating. 

Month-over-month inventory levels dropped in October, meaning more competition for buyers but a return to somewhat normal market seasonality after months of record-breaking activity. Home values are expected to grow 3.8% by January 2022 with persisting tight market conditions and strong demand for the year to come. 

The Zillow Home Value Index (ZHVI) rose 1.3% from September, to now $312,728, up 19.2% from October 2020 level. The annual growth represents an all-time high in data dating back more than 20 years, and the monthly pace is higher than at any point recorded prior to the pandemic — but is still down notably from the a recent high of 2% set in July. The average October monthly appreciation in the U.S. from 2015 through 2019 was 0.4%. In other words, even as the market cools, it is cooling off from an exceptionally hot starting temperature.

Home values didn’t drop in any of the 50 largest U.S. metros, but monthly home value growth decelerated in 42 of them. The slowest monthly growth was seen in Milwaukee (0.1%), San Francisco (0.3%), Buffalo (0.3%) and St. Louis (0.4%), while the fastest was in Raleigh (2.7%), Nashville (2.4%) and Atlanta (2.3%). Still, even as the overall slowdown in the market continued, October also provided early indications that the slowdown in home value growth is itself slowing down: the decline in monthly ZHVI growth was slightly smaller than the decline recorded in September from August. 

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