A strong and widespread recovery of rents has pushed prices beyond where they would have been had the coronavirus pandemic never occurred, according to Zillow’s latest market report. The report shows Phoenix leads the nation in annual rent growth at 23.1%, and is No. 2 in home value growth with 29.8%, behind only Austin, Texas.
Although U.S. home appreciation again broke records in July, there are signs of a rebalancing in the for-sale market to come, with inventory rising for the third consecutive month and home value appreciation slowing in nearly half the major markets.
Rent growth continued to build on momentum that began in March, following a period of sluggishness that started with the COVID-19 outbreak in 2020. Nationally, typical monthly rents rose to $1,843 in July, surpassing June’s record appreciation and rising 9.2%, or $156, above July 2020.
“With the economy continuing to reopen, employees receiving more long-term guidance on remote work, and as students find their way back to college campuses, the rental market is picking back up,” said Nicole Bachaud, Zillow economic data analyst. “As high demand puts pressure on rents and incomes are unable to keep up, affordability will become more of a challenge in the coming months.”
Key July housing stats for Metro Phoenix
• Inventory is up 1.6% from June, but still down 18.8% compared to last July
• Typical home values are $390,733, up 3.4% month over month and up 29.8% year over year
• Typical rents are $1,746, up 23.1% year over year
• The share of listings with a price cut was 10% in July, up 2.1% from June
