Housing inventory should reach pre-pandemic levels by the end of 2024, according to the results of Zillow’s latest Home Price Expectations Survey. More than 100 market experts and economists weighed in to predict upcoming home supply trends as well as how that might affect future home values.
From a monthly average of 1.6 million units in 2019, inventory fell to roughly 1 million in 2021 — with 2022 numbers sinking even lower. But the vast majority Zillow respondents, 79% in all, expect a return to normalcy before 2025. Thirty-eight percent predict inventory levels to hit 1.5 million units monthly by the end of 2024, followed closely by the 37% who predict that benchmark by the end of 2023. An additional 4% suspect inventory will recover by the end of this year.
In turn, appreciation is also expected to slow. Home values skyrocketed 32% over the last two years of low inventory, but the average home value growth predicted for 2022 is just 9%, down significantly from the 19% growth rate seen last year. Looking ahead further, though, respondents were split on price expectations. Between now and the end of 2026, respondents forecast a 26.8% cumulative rise, on average.
Another notable takeaway from the survey results is the impending return of the first-time homebuyer. As market conditions led to unprecedented pricing, the share of first-time buyers shrunk to 37% in 2021. But 62.6% of the Zillow respondents now predict first-time buyers to make up at least 45% of total buyers by the start of 2025.