Housing affordability now at 15-year low – report

In fact, even as rent prices ballooned since the start of 2021, mortgage payments are still more expensive in most of the US. According to Zillow, a typical rent payment in May ran higher than a mortgage payment in only five of the country’s 50 largest metros. In 2019, rent was more expensive than mortgage payments in 28 of 50 metros.

The report also noted that home values have begun to turn a corner, with May seeing a slightly slower pace of annual growth at 20.7%, down from 20.9% in April. According to Zillow, this signals the possibility of the market having passed an inflection point for home values between April and May.

“Arriving in the middle of the spring selling season, this deceleration is a clear signal that buyers are dialing back their demand for homes in the face of daunting affordability challenges,” said Jeff Tucker, senior economist at Zillow.

House sales have also shown signs of slowing down, with Zillow reporting that the number of for-sale listings that went under contract in May decreased by nearly 20% from 2021, when activity was at a four-year peak, and 2% from 2019. The median time on market for new listings was found to be just seven days, holding steady from April and even with last May.

The share of listings with a price cut has gone up as well, rising to 11.5% in May from a recent low of 8.5% in February.