A “drought” of new listings is driving up prices, reversing the sluggishness of late 2022 and forcing buyers to compete fiercely for homes, according to a new analysis from Zillow.

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A year after mortgage rates began their precipitous climb and slowed the housing market way down, a “drought” of new listings is now driving prices back up and has ultimately brought back a seller’s market.

That’s according to a new report from Zillow, which notes that buyers are flocking to springtime open houses and home values climbed 1 percent between March and April. Though the report describes that increase as “relatively normal,” it also points out that normal is a “remarkable turnaround” from the latter part of 2022, when rate-related affordability issues led to a market that was “much cooler” than normal.


“April data indicate that housing has returned to a seller’s market,” the report concludes.

That’s good news for this year’s homesellers and their agents.

But it’s much more of a mixed bag for everyone else; strong demand is driving prices, but so too is a shortage of homes. In fact, the report notes that new listings were down 28 percent year over year in April, which is worse than March, when new listings were down 22.2 percent. According to the report, homeowners with low mortgage rates are reluctant to move and trade up for a much higher rate.

The report ultimately describes the market as experiencing a deepening “new listings drought.”

Year over year new listings. Credit: Zillow

“All told, about half a million fewer new listings have entered the market in the first four months of 2023 than in 2019’s first four months — a deficit of 30 percent,” the report notes.

Other figures that highlight the severe lack of homes for sale include active inventory, which was up a meager 2.9 percent year over year in April but down 45.8 percent compared to the same period in 2019, and newly pending listings, which were down 21.2 percent last month.

All of this means that while anyone with a home to sell is poised to do well, buyers and their clients are likely to be left fighting over a comparatively small number of available properties.

The report also notes that rents are climbing again.

“Asking rents climbed 0.6 percent month-over-month, a nearly-normal monthly growth rate for this time of year,” the report states. “Rents are now 5.3 percent higher than in April of last year.”

Lawrence Yun

Zillow’s report comes the same week that the National Association of Realtors also documented widespread increases in home prices. Lawrence Yun, NAR’s chief economist, attributed the price growth to low inventory.

“Due to the intense housing inventory shortage, multiple offers are returning, especially on affordable homes,” Yun said in a statement on NAR’s findings. “Price declines could be short-lived.”

Though the report paints a picture of a nation suffering from low inventory, it also notes that not all markets are the same. And in 22 metro areas, home values are actually down. Austin, Texas, has experienced the biggest dip, with home values in April down 10 percent compared to the same period in 2022.

Other cities with the biggest year-over-year drops in home values include San Francisco, San Jose, Seattle, and Sacramento.

However even in those western cities, buyers are unlikely to find a deal; the report points out that while values are down compared to a year ago, they were actually up in April compared to March. In fact, their gains in April outpaced the broader national market.

Why is that? In one word: inventory.

“These West Coast markets experienced some of the biggest contractions in the flow of new listings,” the report states, “helping to explain why their price declines have gone into reverse this spring.”

Email Jim Dalrymple II

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