September Market Growth Suggests Appreciation Balance

The U.S. Zillow Home Value Index (ZHVI) reports another record pace of appreciation in September, but after a peak month in July, a heated housing market may be slowing down.

The monthly appreciation rate for September rose 1.6% from August, but this growth comes after rates hit a peak of 2% in July, signaling more balance in the month ahead.

Annual growth in home values set another record high of 18.4% in September, but a closer look at the data reveals that the modest slowdown in growth that began late in the summer continued into early fall, giving buyers slightly more selection and a bit more time to breathe.

The U.S. Zillow Home Value Index (ZHVI) rose to $308,220 in September, up 1.6% from August. That’s the fourth-fastest monthly pace of appreciation recorded by Zillow in data dating back to 2000, but also the second-straight slowdown after monthly appreciation peaked this year at 2% in July (slowing to 1.8% in August). The typical U.S. home was worth 18.4% more in September 2021 than it was in September 2020, surpassing August’s then-record of 17.5% annual appreciation.

Home values were up on the month and the year in all 50 of the largest metro areas tracked by Zillow. Monthly growth in these markets ranged from a low of 0.4% in San Jose to 3.0% appreciation in Raleigh. Annual appreciation in large markets was in the double digits across all 50 markets, ranging as high as an eye-watering 44.9% in Austin and 32.2% in Phoenix to a comparatively “sluggish” rate of 13.2% in New Orleans.

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