Look, what we're seeing out of Zillow's August report is pretty straightforward: buyers are hitting pause. Mortgage rates stayed stuck above six and a half percent, which is the highest we've seen in a year, and that's keeping a lot of folks from pulling the trigger on purchases. When you look at newly pending sales, which tell us what's likely to close down the road, those numbers fell short of last year's pace. That's the real canary in the coal mine here, because it suggests we're not going to see a big rebound anytime soon.
The interesting thing is that homes are still appreciating a bit. The typical home value across the country climbed just over one percent from a year ago, but here's the catch: monthly mortgage payments are running about two percent higher than they were twelve months back. So even though the houses aren't exploding in value, the cost to actually own them has definitely gone up. Renters aren't getting relief either. According to Zillow Research, rents jumped two and a half percent year over year, and that growth is actually picking up steam compared to earlier this year.
What's happening is some of that demand that used to go toward buying is shifting to renting. The rental market is absorbing folks who might have otherwise been in the market for a home. It's a natural response when the math on ownership doesn't work as well as the math on renting. Interestingly, we do have more homes available than we did a year ago, with national inventory up about three percent. That's usually good news, but new listings actually fell pretty sharply from July, and more sellers are cutting prices to move their properties. That tells me sellers still need to be realistic about what the market will bear right now.
What I am seeing locally here in the Bay Area and East Bay is that this national trend is definitely showing up in our market too. Buyers are being more thoughtful and selective because rates are eating into their buying power, and some folks are choosing to wait it out as renters instead. For sellers, this means you need to price competitively and be ready to negotiate. The advantage isn't with sellers right now, and the sooner folks accept that, the better positioned they'll be to actually move their homes.
