• Payrolls beat expectations at +172,000, but the bigger news is revisions: March and April were revised up a combined 93,000, lifting the three-month average to 188,000.
• Gains were concentrated in three sectors — leisure and hospitality, local government, and health care.
• Wage growth is not re-accelerating alongside hiring — year-over-year earnings have decelerated again to 3.4%, while inflation runs higher.
• The housing recovery remains on pause — and the “cheaper mortgage” story doesn’t hold up when measured in real purchasing power

What Happened

Total nonfarm payroll employment increased by 172,000 in May — well above the 85,000 forecast — and the unemployment rate was unchanged at 4.3 percent. Solid. But the real story is in the revisions. March was revised up 29,000 to +214,000, and April was revised up 64,000 to +179,000 — a combined +93,000 above prior estimates. April, which looked like a soft 115,000 at the time, was actually a solid 179,000. The three-month average for nonfarm payrolls has jumped to 188,000 — compared to the 48,000 alarm bell in April’s report. The labor market looks stable, but workers’ bargaining power is eroding.

Industry Details

Leisure and hospitality led with 70,000 jobs — well above the 14,000 monthly average of the prior 12 months. Local government added 55,000. Health care added 35,000, in line with its recent trend.

But the gains were concentrated, not broad-based. The private-sector diffusion index came in at 54.4 in May — barely above the neutral 50 threshold — meaning just over half of industries added jobs. The manufacturing diffusion index improved more meaningfully, rising to 53.5 from 46.5 in April, but that follows months of contraction. The headline number is strong; the distribution underneath it is not.

The weak spot: financial activities lost 22,000 jobs and is now down 107,000 since its May 2025 peak, as elevated rates continue to weigh on banking and insurance.

The Household Survey

The unemployment rate has held between 4.3 and 4.5 percent since July 2025. Resilient, but not tightening. More troubling: long-term unemployment held at 2 million but is up 524,000 over the year. The pool of workers locked out of re-employment is quietly growing even as the headline holds. On the positive side, involuntary part-time work edged down to 4.8 million from April’s 4.9 million spike — a tentative sign that job quality is stabilizing.

Is the Labor Market Heating Up? Not in Wages.

Jobs are coming back. Pay is not keeping up. Average hourly earnings rose 0.3 percent month over month in May — an improvement over April’s 0.2 percent — but year-over-year earnings growth came in at 3.4 percent. Nominal wage growth is slowing, and inflation is eating at those gains. Real wages are falling — even as payroll gains have surged. More hiring without higher real wages is not the re-acceleration that changes the consumer outlook.

What This Means for Housing

May’s Zillow Market Report headline: the housing recovery is back on pause. Home sales rose 4.8 percent month over month but fell 2.9 percent from last year. New listings are down 4.1 percent year over year, and a 30-month streak of annual inventory growth is threatening to flatline.

On paper, the typical mortgage payment is lower than a year ago. But that nominal improvement is misleading when real incomes are falling. With PCE inflation running at 3.77 percent year over year, the average household is paying roughly $165 more per month on everything outside the mortgage. The $65-$75 in monthly mortgage savings is more than offset by the inflation tax on groceries, gas, insurance, and services. Affordability has not improved the way the nominal numbers suggest.

The binding constraints on housing are real income and confidence — not just the mortgage rate. A genuine re-acceleration would need to deliver three things: job security broad enough to unlock seller mobility, wage growth that finally outruns inflation, and the confidence for households to take on a 30-year commitment. May’s report does not yet change the story.

Numbers to Know

Nonfarm payrolls: +172,000 in May, down from the revised +179,000 in April payrolls

Three-month average payroll growth: +188,000 per month vs. +48,000 last month 

Unemployment rate: 4.3%, unchanged from April

Labor force participation rate: 61.8%, unchanged from April 

Employment-population ratio: 59.2% vs. 59.1% in April 

Long-term unemployed (27+ weeks): 2.0 million, up 524,000 over the year 

Part time for economic reasons: 4.8 million vs. 4.9 million in April 

Average hourly earnings: +0.3% month over month vs. +0.2% in April; +3.4% year over year vs. +3.6% in April 

Diffusion index (private, 250 industries): 54.4 vs. 54.0 in April

The post May 2026 Jobs Report: A Turn in the Headline Number — But Is It a Turn in the Story? appeared first on Zillow Research.

• Buying still beats renting nationally under current market conditions — just not right away. A buyer purchasing the typical U.S. home comes out ahead after about 5.9  years with 5% down and 6.0 years with 20% down. Among the 50 largest metros, Columbus, Memphis and Buffalo are the fastest places to get there, with buy-versus-rent breakeven arriving in roughly 3.5 to 4.2  years, depending on down payment.
• At the other end of the spectrum, San Francisco, San Jose and New Orleans are the clearest examples of markets where today’s prices and rents leave renting ahead even over a full 30-year horizon.
• Putting more money down usually improves the long-run financial result. But it does not always get buyers to break even faster.

For years, the rent-versus-buy debate has bounced between two extremes. One camp treats buying as the obvious smart move. The other treats homeownership as a financial mistake almost by default.

Neither view is very helpful.

The real question is simpler: Under today’s market conditions, where does buying leave a household better off than renting, and how long does it take to get there?

The latest Zillow estimates point to a familiar but important answer. Nationally, buying still works — mostly for households with some staying power. The typical U.S. home value for single family homes is about $368,720, typical rent is about $1,951 a month, and buy-versus-rent breakeven comes in at about 5.9 years with 5% down and 6.0 years with 20% down even at slightly above 6% 30-year fixed rate mortgage.

By the end of 30 years, the homeowner comes out ahead while the renter does not. With 20% down, the homeowner finishes with about $735,000 in net housing wealth — roughly $2.01 million from home equity and the savings from the months when owning costs less than renting, against about $1.28 million in total ownership costs. The renter gains about $313,000 from investing the cash not used for a down payment and closing costs, plus whatever is saved in the months when renting is cheaper, but still pays about $1.47 million in rent and renter’s insurance over the same period. That leaves the renter’s net position at about -$1.15 million. With 5% down, the pattern is similar: homeowner wealth ends around $553,000, while the renter’s net position is roughly -$1.32million after 30 years.

That is the first bad rule of thumb to drop: a higher monthly cost at the start does not automatically mean buying is the worse financial choice.

Renting often does look better at the beginning. Buyers face a slew of up-front costs in the mortgage payment, property taxes, insurance, maintenance, a down payment, closing costs and eventually selling costs. Renters pay rent and renter’s insurance, but they also keep the cash they did not sink into the purchase.

That part matters.

Renting does not just mean avoiding a mortgage. It also means keeping the would-be down payment and closing costs available to invest somewhere else. That cash is a real advantage for renters. For buyers, it is the opportunity cost of tying money up in the home.

That helps explain why the usual advice to “put down as much as you can” misses part of the story.

A smaller down payment preserves more liquid cash. But it also means a larger loan, more interest paid over time and, below 20%, often mortgage insurance. So the question is not whether “more invested cash is always better.” The question is whether the return on the cash kept out of the home is high enough to make up for the extra borrowing costs that come with putting less down.

Sometimes it is. Sometimes it isn’t.

That is why the down-payment decision is best understood as a tradeoff between liquidity now and borrowing costs later.

Why 5% down breaks even faster in some markets — and 20% down does in others

One pattern in the rent-versus-buy numbers is easy to miss if you only look at the long run: 20% down produces the strongest long-run homeowner wealth in every market, but it is not always the fastest way to get to breakeven.

The reason is pretty straightforward. A lower down payment makes it easier to get in the door because the upfront cash requirement is smaller. That can help buyers catch up to renters sooner. But it also raises the ongoing cost of owning through a larger mortgage balance, more interest and, in many cases, PMI. A larger down payment flips that tradeoff around: it raises the hurdle at the start, but lowers the cost of carrying the home month after month.

The split across markets is not coming from different metro-level rent-growth assumptions in this version of the analysis. Rent is projected forward using the same rent-growth series across markets. What changes from one metro to the next is mainly the relationship between today’s rent and today’s cost of owning, along with the market-specific path for home value appreciation. In places where rents are already high relative to home prices and home values are expected to keep appreciating, a smaller down payment can sometimes pull breakeven forward. 

That is why Columbus, the fastest-breakeven market under current conditions, behaves the way it does. With 5% down, buying overtakes renting in about 3.5 years. With 20% down, it takes about 4.1 years. In Columbus, lowering the upfront hurdle helps the buyer get ahead faster.

But faster is not the same thing as better at the finish line. By the 30-year mark, 20% down still delivers the strongest homeowner wealth result in Columbus.

Chicago shows the other version of the story. There, 20% down is both slightly faster to breakeven and stronger in the long run than 5% down. In Chicago, the savings from borrowing less matter more than the benefit of keeping extra cash free at the start.

That helps explain the broader map. In places where rents are already high relative to home prices and home values are expected to keep appreciating, a smaller down payment can sometimes pull breakeven forward. In places where owning is still expensive relative to renting, or appreciation is less supportive, the lower monthly cost of a 20%-down loan tends to matter more.

So the better way to frame the down-payment question is not “is a low down payment bad?” It is: what balance of upfront liquidity and ongoing borrowing cost makes the most sense in this market?

Where buying pays off fastest

If the goal is to find the places where buying pays off fastest at today’s prices and rents, the answer is not the usual list of high-cost coastal markets.

Across the 50 largest metro areas, the fastest breakeven markets are:

Columbus, Memphis, Buffalo, Indianapolis and Cincinnati. 

Columbus is the fastest, reaching breakeven in about 3.5 years with 5% down and 4.1 years with 20% down. Memphis and Buffalo are close behind, both in roughly the 3.7- to 4.2-year range. Indianapolis and Cincinnati follow, with Louisville just behind them.

Where today’s prices make buying a longer game

Not every market fits that profile.

If the question changes from “where do buyers catch up fastest?” to “where does buying create the biggest long-run wealth edge?” the list shifts somewhat. Salt Lake City and Las Vegas stand out most, with Phoenix also near the top.

That pattern makes sense. The strongest markets for buying tend to combine three things: rents that are not especially cheap compared with owning, home values that still have room to grow, and carrying costs that do not overwhelm the ownership case.

San Francisco, San Jose and New Orleans are the clearest cases where, under today’s typical home values and asking rents, buying does not overtake renting within the full 30-year horizon.

That does not mean owning in those places is always a mistake. It means that at today’s prices, the financial payoff to buying is weak relative to renting. Homeownership costs are high enough, compared with local rents, that the purchase price is hard to earn back through appreciation and avoided rent over the time horizon used here.

Under current conditions, with 20% down, the gap still favors renting after 30 years by about:

• $583,000 in San Francisco
• $1.89million in San Jose
• $3.39 million in New Orleans

There is also a middle group of metros where buying eventually does pull ahead, but only after a long wait. The slowest finite breakevens are San Diego, Seattle, Austin, Los Angeles and Portland. In those markets, buying can still win under current conditions — but only after roughly 17 to 25 years.

That is another broad claim worth retiring: buying is not automatically a bad deal in expensive markets, but it often becomes a long-horizon decision.

Why rising rents still matter

One reason buying can still make sense in many places is that housing is not just an investment story. It is also a story about the cost of shelter.

When rents and home values rise quickly, homeowners benefit twice. They own an asset that can appreciate, and they are partly insulated from future rent increases. Renters do not get the appreciation and remain exposed to the next lease reset.

That does not mean rents and home values never fall. They do. But national rents are sticky downward, and broad national declines in the Zillow Home Value Index have been far less common than many people assume.

That is why the strongest anti-buying arguments tend to overreach. Buying is not a guaranteed win. But renting is not a permanent free option either. In markets where rents keep climbing, home values keep appreciating and households stay put long enough, ownership still carries a meaningful financial advantage.

Two assumptions worth keeping in mind

This comparison leaves out the federal tax treatment of homeownership, which generally favors buyers. Homeowners may be able to deduct mortgage interest and, up to the cap, state and local property taxes if they itemize. They can also often exclude a substantial share of capital gains when they sell a primary residence. None of those benefits show up on the renter’s side. Including them would make buying look somewhat better than it does here, though the effect would vary a lot from one household to another.

The assumed return on the renter’s invested cash matters too — a lot. The higher that return, the stronger the case for renting. Someone who invests the would-be down payment and leaves it alone for decades will end up in a very different place than someone who lets that money sit in cash, or spends it. So these breakeven numbers should be read as a disciplined comparison, not a universal answer for every household.

The rent-versus-buy math does not say “buy no matter what.”

Nationally, buying still works for households that expect to stay put for around six years or longer.

In relatively more affordable markets, where home values are still appreciating and rents are not cheap relative to ownership, buying pays off much sooner.

And in a small set of markets — especially San Francisco, San Jose and New Orleans — today’s prices make renting the stronger financial choice all the way through the 30-year horizon.

The bigger point is not that owning is always smart or always dumb. It is that the answer changes with the market, the mortgage rate, the down payment, the expected path of rents and home values, the return earned on cash kept outside the home, and, above all, how long a household expects to stay.

The post Where Buying Pays Off Sooner — and Where Today’s Prices Make It Harder appeared first on Zillow Research.

The post Buy vs. Rent Breakeven appeared first on Zillow Research.

New listings have historically peaked in May or June but sellers pulled back this May; new listings ticked down 0.8% month over month, and now stand 4.1% lower than last year. 

Sales trended up from April, rising 4.8% month over month, but fell off the historic trend line, declining 2.9% from last year. 

Meanwhile, inventory growth continued to rise on an annual basis, extending an unbroken streak of annual growth to 30 straight months. However, the pace slowed and is trending toward negative, inching up 1% from last year. Weekly data suggests it could flatline in the next four weeks. A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year

Typical home values rose slightly (0.6%) on a monthly basis to $368,720. Combined with higher mortgage rates, that brought the cost of a typical mortgage to $1,861, rising 1.1% from April to May. However, mortgage rates remain lower than last year — even with a 0.8% annual growth in home values, typical mortgage costs are still 3.1% lower than last May. 

Home Values & Mortgage Payments

• The typical U.S. home value is $368,720. 
• The Zillow Home Value Index (ZHVI) rose 0.6% month over month in May. 
• Home values are 0.8% higher than a year earlier. 
• The monthly mortgage payment on a typical U.S. home is $1,861, assuming a 20% down payment and excluding taxes and insurance. That is 3.1% lower than last year. 

Inventory

• There were 1.36 million homes for sale nationwide in May. 
• Active inventory was 1% higher than a year earlier. Inventory rose 4.6% from April. 
• New for-sale listings totaled 422,956 in May, down 4.1% from a year earlier and down 0.8% from April. 

Sales

• 341,929 homes were sold in May, according to the preliminary Zillow sales count nowcast. That is 2.9% lower than a year earlier and up 4.8% from April. 

Competition

• Homes took a median of 18 days to go pending in May. That was one day longer than a year earlier and one day longer than April. The share of listings with a price cut in May was 23.9%. That’s compared to 25.7% a year earlier and 23.5% in April. 
• 28.4% of homes sold above list price in April, the most recent data available. That’s compared to 30.1% a year earlier and 25.4% in March.

Rents

• The typical rent nationwide is $1,951, according to the Zillow Observed Rent Index. That’s 2% higher than a year earlier and up 0.5% from April. 
• 39.6% of rental listings on Zillow offered a concession in May. That’s compared to 35.1% a year earlier and 39.8% in April.

Local data can be found on Zillow’s market explorer. The Zillow June Market Report is expected to be released July 7. 

*Table ordered by market size 

The post Zillow’s May Market Report: The housing recovery is back on pause appeared first on Zillow Research.

Our rent vs. buy analysis simulates both scenarios over a 30-year horizon to determine when, and whether, buying becomes financially preferable to renting in a given market. We produce this metric for the nation and the top 50 largest metropolitan areas to help inform housing decisions and affordability research.

What We Model

The analysis compares two households with identical incomes making different housing choices, assuming a homeowner would make either a 5%, 10%, or 20% down payment:

The Buyer purchases a home with a fixed-rate 30-year mortgage and bears all the costs of homeownership: mortgage payments, property taxes, insurance, maintenance, and closing costs at both purchase and sale. Over time, they build equity as they pay down the loan and as the home appreciates in value.

The Renter pays monthly rent and renter’s insurance, but invests the money they would have spent on a down payment and closing costs. This investment grows at a conservative risk-free rate over the 30-year period.

We then calculate the net financial position for each household every month over 30 years and discount those outcomes to present value. This allows us to identify the “breakeven point”—the number of years you’d need to stay in the home before buying becomes financially advantageous compared to renting.

The analysis draws on several data sources:

• Zillow Home Value Index (ZHVI): We use the single-family residential home values for the middle price tier (homes valued between the 33rd and 67th percentiles) to represent typical home prices in each market.
• Zillow Observed Rent Index (ZORI): Single-family rental prices provide the starting rent levels for each market.
• Consumer Price Index for Rent (CPI Rent): Published by the Bureau of Labor Statistics, this national measure provides a stable, long-term baseline for projecting how rents grow over time.
• 10-Year Treasury Yield: We use the 10-year Treasury rate as a proxy for the risk-free rate of return, both for the renter’s investment portfolio and for discounting future cash flows to present value.
• Market-Level Costs: Our analysis incorporates region-specific property tax rates, homeowners insurance costs, and maintenance expenses, along with prevailing mortgage rates.

The Methodology

Our analysis proceeds in eight steps: estimating growth rates, building the payment schedule, computing loan amortization, calculating costs for each household, computing benefits, comparing outcomes, and discounting to present value to find breakeven points.

Step 1: Projecting Future Growth

To simulate costs and benefits over 30 years, we need to project how home prices, rents, and insurance costs will change. We use historical market-specific growth rates as a guide.

Step 3: Understanding the Homeowner’s Costs

A homeowner’s monthly mortgage payment contains a number of components, some of which are the cost of the loan, and some of which contribute to equity. Each mortgage payment contains both principal (which reduces your loan balance) and interest (which compensates the lender). Early payments are mostly interest; later payments are mostly principal. We use a closed-form formula to determine what fraction of each payment goes toward principal:

where r is the monthly interest rate and k is the number of payments remaining. As you pay down your mortgage and as your home appreciates, your equity grows. We project home prices forward using the historical growth rate, interpolating monthly to create a smooth price trajectory. Equity at each month is simply:

Homeowners trade off significant up front and some ongoing costs for equity in a stable asset. We incorporate the following:

• The down payment (ranging from 5-20% of the home price)
• Private mortgage insurance (PMI), assumed at 1% for down payments less than 20%. When the loan-to-value ratio of the property reaches 22%, this automatically goes away.
• Buyer closing costs (this is things like title insurance, …), assumed at 3% of the home price.
• Property taxes, determined by local estimates.
• Homeowner’s insurance, determined by local estimates and projected based on historical insurance rate increases.
• Maintenance costs, assumed at 0.5% of the home price.
• Seller closing costs (agent commissions, …), assumed at 6% of the home price at selling.

Property taxes and maintenance costs grow with the projected home value. Insurance costs are based on the original purchase price adjusted by how insurance rates change over time.

Step 5: Renter Costs

Renters have a much simpler cost structure:

• Monthly rent, which grows annually at the historical CPI rent growth rate.
• Renter’s insurance, assumed at 1% of monthly rent.

We exclude broker fees from this analysis, since broker’s fees are highly regional and variable.

Step 6: Savings and Investment

Both households can afford whichever monthly payment is higher. When one household pays less than the other, the difference represents money they can save and invest:

• If renting costs more than owning: The homeowner effectively “saves” the difference each month.
• If owning costs more than renting: The renter saves and invests the difference.

Additionally, the renter invests the lump sum they would have used for a down payment and closing costs. This investment grows monthly at the risk-free rate (10-year Treasury yield):

The renter’s total financial benefit at each point includes their accumulated savings, their initial investment, and all investment earnings.

Step 7: Comparing Net Positions

At each month in the 30-year timeline, we calculate what each household’s financial position would be if the homeowner decided to sell:

Homeowner’s Net Position:

Renter’s Net Position:

Step 8: Discounting to Present Value and Finding the Breakeven

Because a dollar today is worth more than a dollar in 30 years, we discount all future net positions back to present value using the risk-free rate (10-year Treasury yield):

We then identify three breakeven points:

• Homeowner breakeven. First month where the homeowner’s net present value turns positive.

• Renter breakeven. First month where the renter’s net present value turns negative.

• Homeowner vs. Renter breakeven. First month where buying becomes more financially advantageous than renting.

The homeowner vs. renter breakeven is the primary metric we report—it tells you how many years you’d need to stay in the home before buying becomes the better financial decision compared to renting for each down payment scenario.

Limitations and Caveats

As with any financial model, ours involves simplifications and assumptions:

• Constant growth rates: We project home prices, rents, and insurance costs using historical average growth rates. This doesn’t capture market cycles, recessions, or regional booms and busts. The 2016-2019 averaging period was chosen to avoid the pandemic era, but past growth may not reflect future trends.
• National rent growth: Because CPI Rent is only available nationally, we apply the same rent growth rate to all markets. Cities with faster or slower rent growth than the national average aren’t differentiated in our projections.
• Fixed mortgage rates: We assume buyers lock in a fixed rate for 30 years and never refinance. In reality, many homeowners refinance when rates drop.
• Tax benefits not included: Our analysis does not factor in mortgage interest deductions, property tax deductions, or the capital gains exclusion on home sales (up to $500,000 for married couples). These tax benefits can make homeownership significantly more attractive for households that itemize deductions.
• Disciplined renter investing: We assume renters consistently invest their down payment savings and any monthly savings at the risk-free rate for 30 years. In practice, many renters may not save or invest this money, or may earn different returns.
• No moving costs for renters: The model doesn’t account for security deposits, application fees, moving expenses, or lease break penalties that renters often face.
• Middle-tier homes only: We analyze homes in the middle price tier (33rd-67th percentile) within each market. Breakeven calculations may differ for starter homes or luxury properties.
• Insurance cost base: Insurance premiums grow with insurance rate changes but not with home price appreciation. This means we may underestimate insurance costs for rapidly appreciating properties.

How to Interpret the Results

A breakeven of 5 years means that for the typical median-income earning household that plans to stay in the same home for at least five years, buying is likely the better financial choice compared to renting. If they were unsure if they would stay that long, renting may be more advantageous.

Keep in mind that this analysis focuses on financial outcomes. The rent vs. buy decision also involves personal factors—lifestyle preferences, job stability, family plans, and the non-financial benefits of homeownership—that our model doesn’t capture.

This methodology is designed to provide a transparent, data-driven framework for comparing the financial implications of renting versus buying. As market conditions, data sources, and economic understanding evolve, we will continue to refine and update our approach.

The post Rent vs. Buy Comparison: Methodology appeared first on Zillow Research.

Mortgage rates linger around nine-month high

While geopolitical tensions continue to move the bond market, mortgage rates are largely fluctuating near a recent nine-month high. Mortgage rates would likely be higher still if not for cushioning from Fannie Mae and Freddie Mac, which have been buying up mortgage-backed securities. 

Inflation remains a concern due to elevated energy prices and last month’s hotter-than-expected consumer and producer price readings. Given renewed uncertainty surrounding the Fed’s rate path, the upcoming Federal Open Market Committee meeting on June 17 will be a key watchpoint. Although June marks the first meeting under the new chair, Kevin Warsh, our baseline expectation is that the change in leadership will not drive significant rate swings, as Fed decisions are inherently built on consensus. While we expect the Fed to hold steady, this meeting will include the release of the Summary of Economic Projections. These projections will offer crucial hints regarding the future path of interest rates and could ultimately move mortgage rates.

What’s the impact on housing?

Elevated rates dragged on the housing market recovery in May, as home sales and new listings fell compared to last year. 

While affordability remains better than it was a year ago, higher mortgage rates have eroded some of the recent affordability improvements shoppers enjoyed when income growth outpaced home value appreciation and rates hovered closer to 6%. As a result, much of the optimism we had heading into 2026 has been dampened. 

Zillow’s research shows that home sales have rebounded most in markets where supply has surged, underscoring a simple constraint: buyers can’t purchase homes that aren’t for sale. That becomes a concern if elevated rates cause would-be sellers to delay listing as they become re-locked into their current mortgage rates.

The post Elevated Mortgage Rates Strangle Housing Market Recovery appeared first on Zillow Research.

What happened: New home sales fell in April. Sales are now 11.3% lower than a year ago. The pace of sales was the slowest for any April since 2022, when mortgage rates rose sharply over a short period of time.

What Zillow Senior Economist Orphe Divounguy says: Mortgage rates reached a nine-month high in April, though they remained below year-ago levels despite the recent run-up.

And while the typical mortgage payment a new buyer would face remains improved from year-ago levels, other household expenses have continued to rise, and inflation-adjusted disposable income is falling. 

Broader economic risks are a constraint on activity. Ongoing geopolitical risks are pushing prices higher and keeping interest rates elevated. This is also showing up in the frozen labor market and job-related moves are one of the primary drivers of home sales.

Slower population growth and a weaker labor market could continue to constrain household formation and residential moves, limiting the extent to which lower mortgage rates translate into increased home sales this year.

Builders will also be facing increased competition from rising resale inventory. With fewer new construction homes in the pipeline, new home sales could stabilize at a lower level than in recent years.

The post April 2026 New Home Sales – Lowest For Any April Since 2022 appeared first on Zillow Research.

This spring has something extra for renters: the most deals ever for this time of year. Concessions — incentives such as free rent, waived fees and discounted move-in costs — are showing up on nearly 40% of listings. For renters, that can translate into meaningful savings both upfront and over the course of a lease.

A year ago, roughly 1 in 3 rental listings offered a concession. Before the pandemic, it was closer to 1 in 6. The shift reflects a market where supply has outpaced demand. Renters now have more options and leverage than they’ve had in years. In response, property managers are increasingly offering sweeteners to get tenants through the door.

A wave of new apartment construction, particularly across the Sun Belt, has added inventory nationwide, pushing the national rental vacancy rate to 7.3% — up from just 5.6% in 2021, when competition for apartments was at its most intense in years. With more units sitting empty, property managers are trying to keep units filled by offering incentives.

Not coincidentally, the markets with the highest share of concessions are places where apartment construction has boomed in recent years: Denver (68.3%), Charlotte (66.6%), Dallas (64.2%), Austin (63.8%) and Nashville (62.6%). In these cities, property managers are going to great lengths to attract renters.

In Zillow’s hottest rental markets, places where competition among renters remains fierce, property managers don’t need to offer as many sweeteners to fill units. Concessions are lowest in Buffalo (11.1%), Providence (12.6%), New York (18.4%), New Orleans (19.2%) and Chicago (21.7%).

For renters who land a concession, the savings can add up fast. At a time when you need to earn nearly $77,200 a year to afford the typical U.S. rental, a free month means roughly $1,930 back in your pocket — and some renters are walking away with even more than that. According to Zillow’s Consumer Housing Trends Report, about a third of recent renters said the best concession is at least their first month’s rent free, meaning thousands in savings. Over the course of a lease, that kind of cushion can meaningfully shift a monthly budget, help build an emergency fund or go toward saving for a down payment.

*Table ordered by market size 

Rents

• The typical asking rent is $1,930 in April, up 0.6% month-over-month. The pre-pandemic average month-over-month change for this time of year is 0.7%.
• Since the beginning of the pandemic, rents have increased by 36.9%.
• Rents are now 1.9% up from last year.
• Rents fell, on a monthly basis, in 2 major metro areas. The largest monthly drops are in Cleveland (-0.2%) and Buffalo (-0.1%).
• Rents are up from year-ago levels in 39 of the 50 largest metro areas. Annual rent increases are highest in San Francisco (6.5%), Virginia Beach (6%), Chicago (5.4%), San Jose (5.1%), and Providence (4.7%).

Single-Family Rents

• The typical asking rent for single-family homes is $2,252 in April, up 0.6% month-over-month. Since the beginning of the pandemic, single-family rents have increased by 45.7%.
• Single-family rents are now up 2.7% from last year.
• Single-family rents fell, on a monthly basis, in 2 major metro areas. The largest monthly drops in single-family rents are in Cleveland (-0.3%) and Baltimore (-0.3%).
• Single-family rents are up from year-ago levels in all 50 of the largest metro areas. Annual single-family rent increases are highest in Providence (7.8%), Buffalo (6%), Milwaukee (5.6%), Virginia Beach (5.3%), and Cincinnati (5.2%).

Multifamily Rents

• The typical asking rent for multifamily homes is $1,770 in April, up 0.5% month-over-month. Since the beginning of the pandemic, multifamily rents have increased by 28.6%.
• Multifamily rents are now up 1.3% from last year.
• Multifamily rents fell, on a monthly basis, in 3 major metro areas. The largest monthly drops in multifamily rents are in Buffalo (-0.2%), Cleveland (-0.2%) and San Antonio (-0.1%).
• Multifamily rents are up from year-ago levels in 34 of the 50 largest metro areas. Annual multifamily rent increases are highest in San Francisco (6.2%), Virginia Beach (5.8%), Chicago (5.3%), San Jose (4.9%), and Providence (4.2%).

Rent Concessions

• 39.8% of rentals on Zillow offered concessions in April.
• The share of rental listings offering concessions was steady month-over-month in April.
• The share of rental listings offering concessions increased by 5ppts from last year.
• The share of rentals with concessions is lower, on a monthly basis, in 24 major metro areas. The largest monthly drops in the share of rentals with concessions are in Milwaukee (-3.8ppts), Salt Lake City (-3.4ppts), San Jose (-2.2ppts), Baltimore (-2ppts), and San Antonio (-1.7ppts).
• The share of rentals with concessions is higher, on a monthly basis, in 26 major metro areas. The largest monthly increases in the share of rentals with concessions are in Cincinnati (2.6ppts), Charlotte (2.5ppts), Columbus (1.7ppts), Riverside (1.3ppts), and Birmingham (1.3ppts).
• Rent concessions are up from year-ago levels in 44 of the 50 largest metro areas. The annual increase in share of rental listings with concessions is highest in Birmingham (17.7ppts), Memphis (13.1ppts), Columbus (12.6ppts), Indianapolis (12.2ppts), and Dallas (10.4ppts).

Rent Affordability

• The median household would spend 26.7% of their income on a new rental in April.
• Rent affordability was flat month-over-month in April. The pre-pandemic share of median household income spent on rent was 26%.
• Rent affordability is now 0.4ppts down from last year.
• The most affordable metro areas for rents are Austin (18.4%), Salt Lake City (18.4%), Raleigh (18.5%), Minneapolis (19.7%), and Denver (19.8%).
• The least affordable metro areas for rents are New York (38.8%), Miami (37.5%), Los Angeles (33.8%), Riverside (31.2%), and Boston (30.4%).

• Income needed to afford rent increased by 1.7% year-over-year in April to $77,186. Since pre-pandemic, the income needed to afford rent has increased by 35.6%.

The post Nearly 40% of listings come with perks this spring (April Rental Report) appeared first on Zillow Research.

When energy prices spiked at the end of February, we modeled a few scenarios showing the different impacts the shock could have on existing home sales this year, with scenarios ranging from a quick end of the shock by May 1 to a persistent shock lasting all year.

While the spring has contained signals of both strong intent and pending sales that reinforced our early optimism, the rise in energy prices appears persistent enough that we are revising our sales forecast down for the year.

Given the current trajectory of energy prices and inflation, our sales count forecast is being revised to 1.2% year-over-year growth in 2026 (0.5% for NAR’s measure of existing home sales) and home value forecast lowered to 0.1% year-over-year growth. While everyone would like to see stronger sales volume this year, and this recent run-up in mortgage rates has contributed to worsening the affordability climate, most of the drag in volume is still the long-run affordability challenges that have been growing since we stopped building following the Global Financial Crisis, and since home prices rose rapidly following the pandemic.

The New Fed Chair

A new Fed chair was sworn in this week, so there is discussion about whether that will change the path for mortgage rates this year. 

On this subject, it’s crucial to remember that the Fed chair is an important voice but not the only voice on the Federal Open Market Committee (FOMC), and the path of rates is dependent on a consensus of FOMC members. Furthermore, lost in the current discussion around disagreement among the members is that the signals really are confusing. 

This is not a case of clear data telling a clear story, with members disagreeing ideologically about their mandate. Rather, I’d argue members are primarily wrestling with a genuinely difficult decision-making environment where the data really is sending conflicting signals. 

The labor market has been offering reasons to be optimistic, but we still have one of the lowest hiring rates in 20 years. Home values haven’t collapsed, but we still have some of the lowest sales volume in recent history. Inflation has come down, with very strong evidence (up until recently) that shelter components would continue to bring it down further, while core Personal Consumption Expenditures (PCE) has been stickier than anyone would like. 

So given all of this, my expectation is that the new chair and the other members of the committee (as well as bond market investors, for that matter) will all be driven by the actual market data rather than by the change in who’s sitting in the chair’s… chair.

The post A New Fed Chair and Higher Inflation: Zillow Home Value and Sales Forecast (May 2026) appeared first on Zillow Research.

 The spring housing market is warming up fastest in places where buyers finally have options to choose from. The trend could help explain why sales still trail pre-pandemic norms, even as individual listings sell at similar speeds. 

Austin leads all major metros in both annual sales growth (20%) and inventory added over pre-pandemic norms (52%). Among the top-10 markets for year-over-year sales growth, six have more inventory than before the pandemic. 

After years of low supply, markets with restocked shelves are seeing relatively stronger sales growth. Construction boomed across the Sun Belt, activity slowed in many markets as they went through a transition period. Now those same markets with a wealth of options for buyers are seeing recovering sales, as incomes are more in line with prices. Having more homes on the market is helping the market function again.

Buyers’ dollars go further in this housing market than they did last year; at the national level a typical monthly mortgage payment is 3.4% lower than April 2025. Sales are slightly higher nationwide, up 2.3% in April compared to last year. 

The rising costs of everything else are one limiting factor, straining budgets and pausing major purchases. Inventory is another. There were 3.7% more active listings in April compared to the year prior, but inventory remains 18.7% below historical norms. 

In areas that responded to the surge in demand by building additional housing, inventory has recovered faster. Housing inventory now exceeds pre-pandemic norms in 19 of the 50 most populous U.S. metros, with concentrations in the South and West. Now, those metros with the most restored inventory are generally where sales are trending up. 

Higher inventory tends to put downward pressure on prices. And where income growth has outpaced price growth in recent years, housing affordability has also improved most. Compared to a year ago, the typical monthly mortgage payment has fallen 9.8% in Austin, 7.4% in Dallas, 7% in Denver, 6.2% in Raleigh and 6% in San Antonio. The savings are large when compared to the rest of the country.

Nationwide, the pace of home sales at the listing level is very close to pre-pandemic norms — the median age of inventory is one day less and listings that do go pending typically do so one day faster than in 2018-2019. The big differences are sales totals, inventory and new listings, which are down 18%, 19% and 16%, respectively, in April.   

*Assuming a 20% down payment, excluding estimates for taxes, insurance and maintenance

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