HOUSING MARKET OVERVIEW 2018 Q2Zillow Economic Research
ZILLOW HOUSING MARKET OVERVIEW | PAGE 1
Table of Contents ��������������������������������������������������������������������������������������������������������������������������������������1Zillow Economic Research ������������������������������������������������������������������������������������������������������������������ 4Zillow Group �����������������������������������������������������������������������������������������������������������������������������������������������7HOME VALUES AND RENTS �������������������������������������������������������������������������������������������������������������� 8
Zillow Home Value Index �����������������������������������������������������������������������������������������������������������������������������������������������9
Zillow Home Value Index, Annual and Monthly Growth ����������������������������������������������������������������������������������10
Annual Home Value Growth ���������������������������������������������������������������������������������������������������������������������������������������� 11
Zillow Home Value Forecast �������������������������������������������������������������������������������������������������������������������������������������� 12
Zillow Home Value Index, by Thirds ������������������������������������������������������������������������������������������������������������������������ 13
Annual Home Value Appreciation, by Thirds ������������������������������������������������������������������������������������������������������ 14
Zillow Rent Index ������������������������������������������������������������������������������������������������������������������������������������������������������������ 15
Annual Rent Appreciation ������������������������������������������������������������������������������������������������������������������������������������������ 16
Multifamily and Single-Family Home Rents ��������������������������������������������������������������������������������������������������������� 17
Zillow Rent Forecast ����������������������������������������������������������������������������������������������������������������������������������������������������� 18
HOUSING AFFORDABILITY ���������������������������������������������������������������������������������������������������������������19Zillow Mortgage and Rent Affordability ���������������������������������������������������������������������������������������������������������������20
Mortgage Affordability by Metro ����������������������������������������������������������������������������������������������������������������������������� 21
Zillow Mortgage Affordability, by Thirds �������������������������������������������������������������������������������������������������������������� 22
Rent Affordability by Metro �������������������������������������������������������������������������������������������������������������������������������������� 23
Table of Contents
ZILLOW HOUSING MARKET OVERVIEW | PAGE 2
Household Income, by Thirds ����������������������������������������������������������������������������������������������������������������������������������� 24
Housing Affordability Table ��������������������������������������������������������������������������������������������������������������������������������������� 25
INVENTORY, CONSTRUCTION AND DEMOGRAPHICS ���������������������������������������������������������26Zillow For-Sale Inventory ������������������������������������������������������������������������������������������������������������������������������������������� 27
Zillow For-Sale Inventory, by Thirds ���������������������������������������������������������������������������������������������������������������������� 28
New Homes Listed For Sale �������������������������������������������������������������������������������������������������������������������������������������� 29
Days on Zillow ����������������������������������������������������������������������������������������������������������������������������������������������������������������30
Home Sales ����������������������������������������������������������������������������������������������������������������������������������������������������������������������� 31
New Residential Construction Permits ����������������������������������������������������������������������������������������������������������������� 32
Age of Sold Homes ������������������������������������������������������������������������������������������������������������������������������������������������������� 33
Home Sale Prices �����������������������������������������������������������������������������������������������������������������������������������������������������������34
Home and Lot Sizes ����������������������������������������������������������������������������������������������������������������������������������������������������� 35
Typical Buyer Profile ��������������������������������������������������������������������������������������������������������������������������������������������������� 36
Single-Family Residence Rentals ���������������������������������������������������������������������������������������������������������������������������� 37
Homeownership Views by Age �������������������������������������������������������������������������������������������������������������������������������� 38
Share of Millennials Living With Their Parents ��������������������������������������������������������������������������������������������������� 39
Comparing First-Time and Repeat Buyers ����������������������������������������������������������������������������������������������������������40
NEW IN Q2 �����������������������������������������������������������������������������������������������������������������������������������������������41U�S� Homeownership Rate �����������������������������������������������������������������������������������������������������������������������������������������42
Homeownership Rate by Race ���������������������������������������������������������������������������������������������������������������������������������43
Rental Listing Affordability ���������������������������������������������������������������������������������������������������������������������������������������44
ZILLOW HOUSING MARKET OVERVIEW | PAGE 3
Newly Formed Households ��������������������������������������������������������������������������������������������������������������������������������������� 45
Home Values in Redlined Areas ������������������������������������������������������������������������������������������������������������������������������� 46
Fertility and Housing���������������������������������������������������������������������������������������������������������������������������������������������������� 47
The Tax Cuts and Jobs Act ���������������������������������������������������������������������������������������������������������������������������������������� 48
The Evolving American Dream �������������������������������������������������������������������������������������������������������������������������������� 49
About Zillow ������������������������������������������������������������������������������������������������������������������������������������������� 53
ZILLOW HOUSING MARKET OVERVIEW | PAGE 4
Zillow Economic Research
Dr� Svenja Gudell, Chief Economist @SvenjaGudell
Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Under Svenja’s leadership, Zillow produces monthly reports on housing trends for more than 450 metros nationwide, with data often available down to the ZIP-code level� In addition, Svenja and her team publish original research on various real estate topics, ranging from rental and mortgage affordability, negative equity and forecasting, to policy, generational and mortgage research� Svenja has presented to various federal agencies and at numerous industry conferences, and has been widely quoted in national and local media�
Prior to joining Zillow, Svenja did economic, financial and strategy consulting for Analysis Group and was an Assistant Economist in the Research Group of the Federal Reserve Bank of New York� Svenja has a Bachelor of Arts in economics from the University of Rochester, a Master of Arts in economics from New York University, a Master of Science in business administration from the University of Rochester, and a Ph�D� in finance from the University of Rochester� Contact Svenja at svenjag@zillow�com
ZILLOW HOUSING MARKET OVERVIEW | PAGE 5
Zillow Economic Research
Dr� Skylar Olsen, Senior Economist
Skylar joined Zillow in the summer of 2012� Her research is used by consumers, policy makers, and other researchers to understand the real estate markets and make better decisions� While authoring numerous research projects such as A House Divided – How Race Colors the Path to Homeownership, she also creates many of Zillow’s real estate metrics, including the Buyer-Seller Index and the Buy-Rent Breakeven Horizon� She holds a Ph�D� in Economics from the University of Washington and specializes in the spatial patterns of housing and demographic change�
Aaron Terrazas, Senior Economist@AaronTerraz
Aaron is a Senior Economist at Zillow where his research focuses primarily on mortgage and rental markets� Previously he was an economist at the United States Treasury Department’s Office of Economic Policy, and a policy analyst at the Migration Policy Institute in Washington, D�C� He received his bachelor’s degree in international relations from Georgetown University and his master’s degree in applied economics from Johns Hopkins University�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 6
Zillow Economic Research
Sarah Mikhitarian, Economist
Sarah joined Zillow in October 2015, working on unveiling current real estate market conditions, interesting patterns in the housing market and past and future market trends� Prior to joining Zillow, Sarah worked at the Institute for Health Metrics and Evaluation, where she conducted research aimed at understanding and improving national and global health and evaluating the performance of health systems� She received her undergraduate degree in both economics and Hispanic studies from Scripps College, and was awarded a Master of Arts in economics with a specialization in applied microeconometrics from the University of Washington�
Alexander Casey, Policy Advisor
Alexander joined Zillow as a policy analyst in the summer of 2016� He works on the Economic Research team, using Zillow’s research to contribute to current public policy concerning housing and the overall economy� Alexander is involved with a variety of policy issues including housing assistance, land use, finance and transportation� Prior to joining Zillow, Alexander worked at the Minnesota Attorney General’s Office on consumer protection issues� Alexander holds an M�P�A� from the Evans School of Public Policy and Governance at the University of Washington, and a B�A� in Sociology from the University of Minnesota�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 7
Zillow Group
Dr� Stan Humphries, Chief Analytics Officer@StanHumphries
Dr� Stan Humphries is the chief analytics officer of Zillow Group, a portfolio of the largest and most vibrant real estate and home-related brands on Web and mobile� Stan is the co-author of the New York Times Best Seller “Zillow Talk: Rewriting the Rules of Real Estate�”
As chief analytics officer, Stan oversees Zillow Group financial planning and analysis, corporate strategy, economic research, data science and engineering, marketing and business analytics, and pricing analytics� Stan was one of Zillow’s earliest pre-launch employees and is the creator of the Zestimate and its first algorithm�
Stan also serves as chief economist for Zillow Group� He has built out the industry-leading economics and analytics team at Zillow, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Stan is a member of Fannie Mae’s Affordable Housing Advisory Council and the Commerce Department’s Data Advisory Council� Stan also serves on the Visiting Committee of the Department of Economics at the University of Washington�
Prior to joining Zillow, Stan spent five years at Expedia, where he ran the advanced analytics team� Before Expedia, Stan served as a researcher and faculty member at the University of Virginia, and was previously a Presidential Management Fellow where he served at NASA, the Office of Science and Technology Policy in the Executive Office of the President, and the Technology Administration within the Department of Commerce� Stan has also served in the United States Peace Corps, where he taught high school physics and chemistry in the West African country of Benin� Stan has a Bachelor of Arts from Davidson College, a Master of Science in foreign service from Georgetown University and a Ph�D� in government from the University of Virginia�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 8
HOME VALUES AND RENTS
• U�S� home values are growing at a steady pace, and have surpassed pre-recession highs nationally and in a number of large markets� Driven largely by limited inventory and high demand, home values are growing fastest at the bottom end of the market�
• Regionally, markets in the Pacific Northwest, Texas, Florida and parts of the Southwest continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�
• Growth in U�S� rents has slowed considerably over the past couple of years and has largely stabilized� Pockets of strong rent appreciation remain in the Pacific Northwest and California�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 9
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
$100K
$110K
$120K
$130K
$140K
$150K
$160K
$170K
$180K
$190K
$200K
$210K
$220K
Zill
ow
Ho
me
Val
ue In
dex
$217,300
May 2007$200,500
February 2012$148,600
U�S� home values have surpassed pre-recession highs�
Source: Zillow Home Value Index (June 2018)�
+46.2% +8.3%Trough-to-Current Year-over-Year
Zillow Home Value Index
ZILLOW HOUSING MARKET OVERVIEW | PAGE 10
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Yea
r-o
ver-
Yea
r C
hang
e in
ZH
VI
-1.0%
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
Mo
nth-
ove
r-M
ont
h C
hang
e in
ZH
VI8.3%
0.5%
Annual Home Value Growth Monthly Home Value Growth
The pace of annual U�S� home value growth has accelerated over the past few years�
Source: Zillow Home Value Index (June 2018)�
Zillow Home Value Index, Annual and Monthly Growth
ZILLOW HOUSING MARKET OVERVIEW | PAGE 11
Washington, DC4.2%
Tampa, FL10.9%
Seattle, WA11.4%
Sacramento, CA6.4%
Pittsburgh, PA7.9%
Phoenix, AZ8.0%
Philadelphia, PA5.9%
Orlando, FL9.7%
New York, NY6.7%
Los Angeles, CA7.6%
Kansas City, MO9.2%
Houston, TX5.8%
Detroit, MI9.7%
Columbus, OH9.1%
Boston, MA7.2%
Austin, TX5.7%
San Francisco, CA11.0%
Minneapolis, MN7.6%
Las Vegas, NV15.0%
San Diego, CA6.6%
Cincinnati, OH6.6%St. Louis, MO
5.5%
Portland, OR5.9%
Atlanta, GA11.6%
Denver, CO7.4%
Chicago, IL5.8%
Dallas, TX11.6%
Miami, FL7.7%4.2% 15.0%
Annual Home Value Growth
Markets in the Pacific Northwest, Texas and Florida continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�
Source: Zillow Home Value Index (June 2018)�
Annual Home Value Growth
ZILLOW HOUSING MARKET OVERVIEW | PAGE 12
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13%Expected Home Value Appreciation Through June 2019
Los Angeles, CA
Detroit, MI
Boston, MA
Dallas, TX
San Francisco, CA
Tampa, FL
Seattle, WA
Chicago, IL
Atlanta, GA
New York, NY
Philadelphia, PA
United States
Minneapolis, MN
Miami, FL
St. Louis, MO
Baltimore, MD
San Diego, CA
Washington, DC
Phoenix, AZ
Riverside, CA
Houston, TX 1.5%1.7%
3.7%3.8%
4.7%4.8%4.9%
5.4%6.1%
6.6%6.8%6.9%7.1%7.1%
7.5%7.5%
7.8%8.1%
9.0%12.1%
6.6%
Home value growth is expected to slow over the next 12 months�
Source: Zillow Home Value Forecast, Top 20 Metros (June 2018)�
Zillow Home Value Forecast
ZILLOW HOUSING MARKET OVERVIEW | PAGE 13
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018$0K
$50K
$100K
$150K
$200K
$250K
$300K
$350K
$400K
Zill
ow
Ho
me
Val
ue In
dex
$380,100
$217,300
$123,200
Bottom Third Median Home Value Top Third
Zillow Home Value Index, by Thirds
Source: Zillow Home Value Index (June 2018)�
Year-over-Year % Change
11.7% 8.3% 5.1%Bottom Third Median Top Third
Homes valued in the bottom-third of the market are growing in value the fastest�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 14
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Ann
ual H
om
e V
alue
Gro
wth
5.1%
11.7%
8.3%
Bottom Third Median Home Value Top Third
Annual Home Value Appreciation, by Thirds
Source: Zillow Home Value Index (June 2018)�
Home value appreciation among homes valued in the bottom third has slowed somewhat, but the annual pace of growth is still more than double that of top-third homes�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 15
2011 2012 2013 2014 2015 2016 2017 2018
$1,240
$1,260
$1,280
$1,300
$1,320
$1,340
$1,360
$1,380
$1,400
$1,420
$1,440
Zill
ow
Ren
t In
dex
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Yea
r-O
ver-
Yea
r C
hang
e in
Zill
ow
Ren
t In
dex
$1,440
1.3%
Zillow Rent Index Annual Rent Growth
Annual growth in rents has slowed since the beginning of 2018�
Source: Zillow Rent Index (June 2018)�
Zillow Rent Index
ZILLOW HOUSING MARKET OVERVIEW | PAGE 16
Washington, DC0.6%
Tampa, FL2.7%
Seattle, WA1.9%
San Jose, CA1.2%
Sacramento, CA5.4%
Pittsburgh, PA0.8%
Phoenix, AZ2.9%
Philadelphia, PA0.2%
Orlando, FL3.3%
New York, NY0.5%
Los Angeles, CA2.8%
Las Vegas, NV4.1%
Kansas City, MO-0.3%
Houston, TX0.9%
Detroit, MI3.1%
Denver, CO2.1%
Columbus, OH2.4%
Boston, MA0.5%
Austin, TX-0.9%
St. Louis, MO0.0%San Francisco, CA
1.1%
San Diego, CA2.0%
Minneapolis, MN2.6%
Miami, FL0.8%
Dallas, TX0.6%
Cincinnati, OH1.4%
Chicago, IL0.0%
Charlotte, NC2.5%
Atlanta, GA3.6%
-0.9% 5.4%
Annual Rent Growth
The annual pace of rent growth is largely sustainable in most large markets�
Source: Zillow Rent Index (June 2018)�
Annual Rent Appreciation
ZILLOW HOUSING MARKET OVERVIEW | PAGE 17
2012 2014 2016 2018
$1,250
$1,300
$1,350
$1,400
$1,450
$1,500
$1,550
Zill
ow
Ren
t In
dex
$1,416
$1,556
2012 2013 2014 2015 2016 2017 2018-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Yo
Y
1.2%
0.7%
Multifamily Units Single-Family Homes
Rents for single-family homes and units in larger multifamily buildings share similar trends�
Source: Zillow Rent Index (June 2018)�
Multifamily and Single-Family Home Rents
ZILLOW HOUSING MARKET OVERVIEW | PAGE 18
-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%Expected Rent Appreciation Through June 2019
Riverside, CA
Tampa, FL
Boston, MA
Minneapolis, MN
Los Angeles, CA
Atlanta, GA
Seattle, WA
Phoenix, AZ
Miami, FL
San Diego, CA
Baltimore, MD
United States
Dallas, TX
Detroit, MI
Philadelphia, PA
New York, NY
St. Louis, MO
San Francisco, CA
Washington, DC
Houston, TX
Chicago, IL
-0.3%
-0.5%
0.0%
0.4%
0.4%
0.5%
2.4%
2.9%
3.8%
2.8%
2.3%
2.2%
2.2%
0.1%
1.8%
1.3%
1.3%
1.5%
1.2%
2.1%
1.1%
Rental appreciation is expected to remain steady over the next year�
Source: Zillow Rent Forecast (June 2018)�
Zillow Rent Forecast
ZILLOW HOUSING MARKET OVERVIEW | PAGE 19
HOUSING AFFORDABILITY• Overall, mortgage affordability – the share of income necessary to afford
a typical mortgage payment – looks reasonable in most markets� But affordability is suffering, especially at the bottom end of the market, as home values nd interest rates rise and incomes fail to keep pace�
• As mortgage and interest rates rise, some would-be home sellers with lower mortgage interest rates may decide not to sell and instead stay in their current home, choosing not to give up a lower monthly payment� This phenomenon of “mortgage rate lock-in” could end up negatively impacting inventory�
• Unlike mortgage affordability, rental affordability is much worse today than it was historically, though the recent slowdown in rent growth has helped somewhat�
• Poor rent affordability is worrisome, as more money devoted to rent makes it more difficult to save for homeownership�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 20
1988 1993 1998 2003 2008 2013 201812%
14%
16%
18%
20%
22%
24%
26%
28%
30%
24%
22%
20%
28%
18%
Average Share of Income Spent on Rent, 1985-2000
Average Share of Income Spent on Mortgage, 1985-2000
Share of IncomeSpent on Mortgage,
1985-2000
Share of IncomeSpent on Mortgage,
2018 Q2
MortgageAffordability
Forecasted at 5%
MortgageAffordability
Forecasted at 6%
MortgageAffordability
Forecasted at 7%
Share of IncomeSpent on Rent,
1985-2000
Share of IncomeSpent on Rent, 2018
Q2
28%26%24%22%20%18%21%
Share of Income Spent on Housing
Nationwide, the share of income spent on a mortgage is well below historic norms�
Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2018 Q2)�
Zillow Mortgage and Rent Affordability
ZILLOW HOUSING MARKET OVERVIEW | PAGE 21
1994 2014 1994 2014 1994 2014 1994 2014 1994 2014
0%
20%
40%
60%
0%
20%
40%
60%
0%
20%
40%
60%
0%
20%
40%
60%
27.9%
New York, NY
45.0%
Los Angeles, CA
15.6%
Chicago, IL
16.7%
Dallas, TX
16.1%
Philadelphia, PA
15.1%
Houston, TX
19.4%
Washington, DC
24.9%
Miami, FL
15.2%
Atlanta, GA
25.8%
Boston, MA
44.9%
San Francisco, CA
12.9%
Detroit, MI
28.3%
Riverside, CA
20.2%
Phoenix, AZ
28.6%
Seattle, WA
16.7%
Minneapolis, MN
37.9%
San Diego, CA
12.6%
St. Louis, MO
18.7%
Tampa, FL
16.0%
Baltimore, MD
Sha
re o
f In
com
e S
pen
t o
n M
ort
gag
e
Mortgage A�ordabilityAverage A�ordability, 1985-2000
Source: Zillow Mortgage Affordability (2018 Q2)�
Mortgage Affordability by MetroIn some coastal markets that have seem rapid home value appreciation, share of income spent on a mortgage has surpassed historic norms�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 22
Weak income growth and rapid appreciation, even with very low mortgage interest rates, means homes are becoming more unaffordable, more quickly for buyers of homes valued in the bottom third�
Source: Zillow Mortgage Affordability (2018 Q2)�
Zillow Mortgage Affordability, by Thirds
2000 2002 2004 2006 2008 2010 2012 2014 2016 20180.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Sha
re o
f In
com
e S
pen
t o
n M
ort
gag
e
12.9%
15.4%
23.9%
Bottom Third Middle Third Top Third
ZILLOW HOUSING MARKET OVERVIEW | PAGE 23
1994 2014 1994 2014 1994 2014 1994 2014 1994 2014
0%
20%
40%
60%
0%
20%
40%
60%
0%
20%
40%
60%
0%
20%
40%
60%
37.7%
New York, NY
46.9%
Los Angeles, CA
28.3%
Chicago, IL
28.4%
Dallas, TX
27.1%
Philadelphia, PA
28.8%
Houston, TX
25.4%
Washington, DC
41.5%
Miami, FL
25.4%
Atlanta, GA
32.7%
Boston, MA
39.2%
San Francisco, CA
24.4%
Detroit, MI
36.8%
Riverside, CA
26.4%
Phoenix, AZ
30.9%
Seattle, WA
25.5%
Minneapolis, MN
40.3%
San Diego, CA
21.8%
St. Louis, MO
31.0%
Tampa, FL
25.6%
Baltimore, MD
Sha
re o
f In
com
e S
pen
t o
n R
ent
Rent A�ordabilityAverage A�ordability, 1985-2000
Rent Affordability by Metro
Source: Zillow Rent Affordability (2018 Q2)�
The share of income spent on rent is higher than the historic average in all but one of the nation’s 20 largest metros�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 24
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018$0K
$10K
$20K
$30K
$40K
$50K
$60K
$70K
$80K
$90K
$100K
$110K
$120K
$130K
Ho
useh
old
Inco
me
$59,049
$20,960
$126,717
Income growth for the lowest earners has been especially weak�
Source: Zillow analysis of U�S� Census Bureau ACS data, IPUMS (2017 Q2)�
Nominal Income Growth,
2000-2016
50.5%Top Third
35.2%Middle Third
30.5%Bottom Third
Household Income, by Thirds
ZILLOW HOUSING MARKET OVERVIEW | PAGE 25Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2018 Q2)�
Housing Affordability Table
Region Name Median Income
Mortgage Affordability,
2018 Q2
Historic Mortgage
Affordability, 1985-2000
Forecast Mortgage
Affordability (5% Interest
Rate)
Forecast Mortgage
Affordability (6% Interest
Rate)
Forecast Mortgage
Affordability (7% Interest
Rate)
Rent Affordability,
2018 Q2
Historic Rent Affordability
1985-2000
United States $60,748 17�5% 21�2% 19�6% 21�9% 24�3% 28�4% 25�8%
New York, NY $75,508 27�9% 29�2% 31�3% 35�0% 38�8% 37�7% 26�3%
Los Angeles, CA $70,373 45�0% 34�6% 53�1% 59�3% 65�8% 46�9% 36�3%
Chicago, IL $69,333 15�6% 23�1% 17�5% 19�6% 21�7% 28�3% 25�3%
Dallas, TX $67,348 16�7% 22�9% 18�9% 21�1% 23�5% 28�4% 21�8%
Philadelphia, PA $69,336 16�1% 20�4% 18�1% 20�2% 22�4% 27�1% 21�4%
Houston, TX $64,575 15�1% 21�1% 16�1% 18�0% 19�9% 28�8% 24�4%
Washington, DC $100,739 19�4% 22�3% 21�2% 23�7% 26�3% 25�4% 17�7%
Miami, FL $53,775 24�9% 20�3% 27�6% 30�8% 34�2% 41�5% 28�6%
Atlanta, GA $65,950 15�2% 18�3% 17�1% 19�1% 21�2% 25�4% 19�3%
Boston, MA $86,622 25�8% 26�3% 29�3% 32�7% 36�3% 32�7% 26�4%
San Francisco, CA $104,172 44�9% 38�5% 50�7% 56�6% 62�9% 39�2% 30�6%
Detroit, MI $58,826 12�9% 16�0% 14�8% 16�5% 18�3% 24�4% 20�0%
Riverside, CA $61,860 28�3% 27�9% 30�2% 33�8% 37�5% 36�8% 32�7%
Phoenix, AZ $61,975 20�2% 21�1% 22�0% 24�5% 27�2% 26�4% 22�8%
Seattle, WA $84,369 28�6% 25�9% 32�2% 36�0% 39�9% 30�9% 23�8%
Minneapolis, MN $76,931 16�7% 17�8% 18�6% 20�7% 23�0% 25�5% 21�2%
San Diego, CA $75,597 37�9% 33�5% 41�7% 46�5% 51�6% 40�3% 34�7%
St� Louis, MO $62,753 12�6% 17�0% 13�9% 15�5% 17�2% 21�8% 21�2%
Tampa, FL $53,782 18�7% 18�8% 21�1% 23�5% 26�1% 31�0% 27�6%
Baltimore, MD $81,411 16�0% 21�6% 17�6% 19�6% 21�8% 25�6% 27�0%
ZILLOW HOUSING MARKET OVERVIEW | PAGE 26
INVENTORY, CONSTRUCTION AND DEMOGRAPHICS
• Inventory of homes for sale is very low, and getting lower� Inventory constraints are particularly acute among entry-level and median homes – the exact homes sought by first-time homebuyers and young families�
• New construction has thus far failed to get back to pre-recession levels, especially for single-family homes�
• Homes that are on the market are selling faster – currently, homes spend ten days less on the market before selling than they did a year ago�
• Millennials do value homeownership, but many are finding it difficult to attain, and more young adults are living with their parents�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 27
2010 2011 2012 2013 2014 2015 2016 2017 2018
1200K
1300K
1400K
1500K
1600K
1700K
1800K
1900K
2000K
2100K
2200K
2300K
Fo
r-S
ale
Inve
nto
ry
1,206,747
The number of U�S� homes for sale is low, and falling
Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (June 2018)�
-48.0% -4.8%Peak-to-Current Year-over-Year
Zillow For-Sale Inventory
ZILLOW HOUSING MARKET OVERVIEW | PAGE 28
2010 2011 2012 2013 2014 2015 2016 2017 20180K
100K
200K
300K
400K
500K
600K
700K
800K
900K
Sm
oo
thed
Sea
sona
lly A
dju
sted
Inve
nto
ry
546,627
304,181
234,243
Bottom Third Middle Third Top Third
Inventory shortages are particularly acute among bottom- and middle-third homes�
Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (June 2018)�
-3.6% -2.9% -5.4%Bottom Third Middle Third Top Third
Year-over-Year % Change
Zillow For-Sale Inventory, by Thirds
ZILLOW HOUSING MARKET OVERVIEW | PAGE 29
2012 2013 2014 2015 2016 20170K
100K
200K
300K
400K
500K
600K
700K
561,740
470,155
New Listing CountNew Listing Count (Trailing Twelve Month Average)
The number of listings hitting the market has remained consistent
Source: Zillow Listing Data (June 2017)�
New Homes Listed For Sale
ZILLOW HOUSING MARKET OVERVIEW | PAGE 30
2010 2011 2012 2013 2014 2015 2016 2017 2018
70
80
90
100
110
120
130
140
Day
s o
n Z
illo
w
66
Homes listed for sale are selling more quickly than in the past few years�
Source: Zillow Days on Zillow, Including REOs (June 2018)�
Days on Zillow
ZILLOW HOUSING MARKET OVERVIEW | PAGE 31
2002 2004 2006 2008 2010 2012 2014 2016 20180.0M
1.0M
2.0M
3.0M
4.0M
5.0M
6.0M
7.0M
Exi
stin
g H
om
e S
ales
0K
200K
400K
600K
800K
1,000K
1,200K
1,400K
New
Ho
me
Sal
es
5.4M
631K
Existing Home Sales New Home Sales
Sales of existing homes largely plateaued in the first half of 2018, while new home sales continue to climb in fits and starts�
Source: National Association of Realtors Existing Home Sales: Single-Family & Condo & Co-op, U�S� Census Bureau New Residential Sales (June 2018)�
Home Sales
ZILLOW HOUSING MARKET OVERVIEW | PAGE 32
2001 2003 2005 2007 2009 2011 2013 2015 2017 20190K
200K
400K
600K
800K
1,000K
1,200K
1,400K
1,600K
1,800K
New
Pri
vate
Ho
usin
g U
nits
Aut
hori
zed
by
Bui
ldin
gP
erm
its
(Sea
sona
lly A
dju
sted
Ann
ual R
ates
)
853K
403K
In structures with 1 unit In structures with 5+ units
Permits for new multifamily projects are near pre-recession levels, while single-family permits remain low�
Source: U�S� Census Bureau: New Residential Construction (June 2018)�
New Residential Construction Permits
ZILLOW HOUSING MARKET OVERVIEW | PAGE 33
2000 2002 2004 2006 2008 2010 2012 2014 20160
3
6
9
12
15
18
21
24
27
30
Med
ian
Ag
e o
f S
old
Ho
mes
2006: 15 years
2015: 28 years
The age of sold homes has almost doubled since the housing collapse, largely because of a lack of new construction�
Source: Zillow analysis of public record transactions, 2015�
Age of Sold Homes
ZILLOW HOUSING MARKET OVERVIEW | PAGE 34
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019$0K
$50K
$100K
$150K
$200K
$250K
$300K
$350K
Sal
e P
rice
$258,031
$304,355
Existing Homes New Homes
The price gap between newly built and and existing homes has widened over the past decade�
Source: National Association of Realtors and U�S� Census Bureau Construction Review (June 2018)�
Home Sale Prices
ZILLOW HOUSING MARKET OVERVIEW | PAGE 35
2000 2002 2004 2006 2008 2010 2012 2014 2016-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Per
cent
Cha
nge
in M
edia
n H
om
e S
ize
and
Med
ian
-13.1%
20.2%
Note: Centered 7-month moving average
Lot Square Feet Structure Square Feet
Since 1999, homes have gotten larger while lots have gotten smaller�
Source: Zillow analysis of U�S� Census Bureau: Survey of Construction microdata, 2000-2016�
Home and Lot Sizes
ZILLOW HOUSING MARKET OVERVIEW | PAGE 36
Typical Buyer Profile
Source: Zillow analysis of U�S� Census Bureau, American Community Survey, 2014, made available by the University of Minnesota, IPUMS-USA�
Existing Homes New Construction
$95KIncome
25 minutesTypical Commute Time
75.5% marriedMarital Status
46.1%Have At Least One Child
26.2%Millennial Share
$70KIncome
56.6% marriedMarital Status
40%Have At Least One Child
30%Millennial Share
20 minutesTypical Commute Time
ZILLOW HOUSING MARKET OVERVIEW | PAGE 37
1982 1987 1992 1997 2002 2007 2012 2017
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
Sha
re o
f S
FR
s T
hat
Are
Ren
ted
18.9%
Renting single-family homes is increasingly popular�
Source: Zillow analysis of U�S� Census Bureau, Current Population Survey 2017, made available by University of Minnesota, IPUMS-USA�
Single-Family Residence Rentals
ZILLOW HOUSING MARKET OVERVIEW | PAGE 38
Owning a home is necessary tolive the American Dream
Owning a homeincreases your standingin the local community
Owning a home is a key to ahigher social status
18-34 35-54 55+ 18-34 35-54 55+ 18-34 35-54 55+0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
63.0% 62.0%67.0%
74.0%
67.0%71.0% 69.0%
66.0%
58.0%
Age Group
Millennials do have positive views of homeownership�
Source: Zillow Housing Aspirations Report (March 2018)�
Homeownership Views by Age
ZILLOW HOUSING MARKET OVERVIEW | PAGE 39
The share of millennials (age 18-34) living with their parents has increased sharply in the past decade�
Source: Zillow analysis of U�S� Census, American Community Survey, 2005-2016, made available by the University of Minnesota, IPUMS-USA�
Share of Millennials Living With Their Parents
ZILLOW HOUSING MARKET OVERVIEW | PAGE 40
1975-1979 2010-2013
32.5 years oldAverage age
$54KIncome in today’s dollars
2 people Household size
6 years Years renting before buying
$140KHome value in today’s dollars
29 years oldAverage age
2.6 people Household size
4.6 years Years renting before buying
$99KHome value in today’s dollars
$55KIncome in today’s dollars
Comparing First-Time and Repeat Buyers
Source: Zillow analysis of University of Michigan Panel Survey of Income Dynamics, 1970-2013�
Today’s first-time home buyer is more than three years older and typically rents longer before making the jump into homeownership compared to previous generations�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 41
NEW IN Q2
• The homeownership rate is at multi-decade lows, as renters stay renting longer and would-be buyers find it difficult to enter the market�
• Birth rates have fallen in markets that have experienced the most home value growth�
• A greater share of rentals are out of reach for black and hispanic households compared to white and Asian households�
• The single-family home in the suburbs remains a mainstream standard of what homeownership should look like but the image of the ideal American home is beginning to evolve, if only slightly� Especially for younger Americans�
ZILLOW HOUSING MARKET OVERVIEW | PAGE 42
1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
63.0%
64.0%
65.0%
66.0%
67.0%
68.0%
69.0%
U.S
. Ho
meo
wne
rshi
p R
ate
64.3%
The U�S� homeownership rate is near historic lows�
Source: U�S� Census Bureau Homeownership Rate for the United States (2018 Q2)�
U�S� Homeownership Rate
ZILLOW HOUSING MARKET OVERVIEW | PAGE 43
1904 1914 1924 1934 1944 1954 1964 1974 1984 1994 2004 20140%
10%
20%
30%
40%
50%
60%
70%
48.1%45.6%
20.5%
71.3%
40.2%41.0%
10.1%
58.1%
1950 Census DataUnavailable
AsianBlackHispanicWhite
The gap between black and white homeownership rates has widened since 1900
Source: Urban Institute analysis of U�S� Census Bureau, Decennial Census and American Community Survey, 1990-2015, made available by IPUMS-USA, University of Minnesota, www�ipums�org�
Homeownership Rate by Race
ZILLOW HOUSING MARKET OVERVIEW | PAGE 44
All Asian Black Hispanic White0%
10%
20%
30%
40%
50%
60%
70%
Sha
re o
f R
enta
l Lis
ting
s A
ffo
rdab
le t
o H
ous
eho
lds
Sp
end
ing
30
per
cent
or
less
of
The
ir In
com
es o
n R
ent
67.4%
49.7%
27.3%
41.9%
16.2%
Blacks and Hispanics can afford fewer rental listings�
Source: Zillow analysis of Zillow rental listings in 2017 and median household income data from the U�S� Census Bureau, American Community Survey, 2016, projected forward using the Burea of Labor Statistics’ Employment Cost Index�
Rental Listing Affordability
ZILLOW HOUSING MARKET OVERVIEW | PAGE 45
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Cum
ulat
ive
Per
cent
Cha
nge
in t
he N
umb
er o
f H
ous
eho
lds
31.7%
24.8%
27.2%
% change total % change owner % change renter
Since 2005, newly formed households have tended to rent�
Source: Zillow analysis of U�S� Census Bureau CPS data 1995-2016, IPUMS�
Newly Formed Households
ZILLOW HOUSING MARKET OVERVIEW | PAGE 46
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019$0K
$100K
$200K
$300K
$400K
$500K
$600K
$276,199
$248,745
$369,841
$640,238
Median home values for areas the government designated best, still desirable, definitely decliningand hazardous for mortgage lending
Home values in the vast majority of neighborhoods that were “redlined” as hazardous for mortgage lending by the federal government 80 years ago are lower now than in areas rated more highly�
Source: Urban Institute analysis of U�S� Census Bureau, Decennial Census and American Community Survey, 1990-2015, made available by IPUMS-USA, University of Minneosta, www�ipums�org�
Home Values in Redlined Areas
ZILLOW HOUSING MARKET OVERVIEW | PAGE 47
2011 2012 2013 2014 2015 201680%
85%
90%
95%
100%
Fer
tilit
y R
ate
for
25-
to 2
9-Y
ear-
Old
Wo
men
Ind
exed
to
2010
86.6%
92.4%
93.6%93.9%94.6%
Birth rates have fallen most in markets that experienced the most home value growth�
Source: Zillow Home Value Index, 2010-2016, and Zillow analysis of age-specific fertility rates from the Centers for Disease Control and Prevention’s National Center for Health Statistics�
Fertility and Housing
ZILLOW HOUSING MARKET OVERVIEW | PAGE 48
Owners
0%5%10%15%20%25%30%
29%
14%
15%
21%
4%
5%
5%
5%
2%
Renters
0% 5% 10% 15% 20% 25% 30%
Savings andinvestment
Paying off debt
Home renovations
Vacation
Car
Appliances orconsumer goods
Entertainment
Housing costs(e.g., buy or rent a
bigger home)
Other
29%
27%
12%
11%
4%
5%
2%
2%
7%
If you were to recieve a 4% raise, how much of this money, if any, would you spend on...?
Americans are likely to reinvest billions in tax savings back into housing�
Source: Zillow Housing Aspirations Report, March 2018
The Tax Cuts and Jobs Act
If you were to receive a 4% raise, how much of this money, if any, would you spend on���?
ZILLOW HOUSING MARKET OVERVIEW | PAGE 49
A clear preference for homeownership
94% 64.3%
of respondents said that if money were no object, they would own their home
U.S. Homeownership Rate, 2018 Q2
Americans have a preference for homeownershiph
Source: Zillow Housing Aspirations Report, March 2018
The Evolving American Dream
ZILLOW HOUSING MARKET OVERVIEW | PAGE 50
22%15%12%
5%
63%56%52%
57%
33%32%22%
31%
26%of Americans prefer to live in an urban area
56%of Americans prefer to live in a suburban area
18%of Americans prefer to live in a rural area
Whites are more likely than other racial and ethnic
groups to prefer rural areas
All races prefer suburban areas
Hispanics, Asians and blacks prefer urban areas
more than whites do
AsianBlackHispanicWhite
Urban
Suburban
Rural
A majority of Americans prefer to live in the suburbs� This preference holds true across races and ethnicities
Source: Zillow Housing Aspirations Report, March 2018
The Evolving American Dream
ZILLOW HOUSING MARKET OVERVIEW | PAGE 51
82% 7%10%of Americans prefer to live
in a single-family homeof Americans prefer
to live in a townhomeof Americans prefer to live in a condo/co-op
Americans overwhelmingly aspire to own a detached single-family home
Source: Zillow Housing Aspirations Report, March 2018
The Evolving American Dream
ZILLOW HOUSING MARKET OVERVIEW | PAGE 52
39% 32%29%of Americans prefer living close to major highways
of Americans do not want to live near major highways or
public transit
of Americans prefer living close to public transit
The share of people who prefer living close to a highway is almost matched by the share who say they’d prefer not to live near the highway�
Source: Zillow Housing Aspirations Report, March 2018
The Evolving American Dream
ZILLOW HOUSING MARKET OVERVIEW | PAGE 53
About Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals� In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr� Svenja Gudell� Dr� Gudell and her team of economists and data analysts produce extensive housing data and research cover-ing more than 450 markets at Zillow Real Estate Research� Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years� Launched in 2006, Zillow is owned and operated by Zil-low Group, Inc� (NASDAQ:Z and ZG), and headquartered in Seattle�
Zillow is a registered trademark of Zillow, Inc�
Press Contact: press@zillow�com