PHOENIX — Phoenix has become the second-leading major market in the nation in housing prices with a year-over-year increase of nearly 30%, according to Zillow’s latest market report.

Home values in Phoenix rose to nearly $400,000, up 3.4% month-over-month and 29.8% year-over-year, which leads the nationwide home value rate of $298,933 by nearly 77%, the report said.

“With the economy continuing to reopen, employees receiving more long-term guidance on remote work, and as students find their way back to college campuses, the rental market is picking back up,” Nicole Bachaud, Zillow economic data analyst, said in a press release.

“As high demand puts pressure on rents and incomes are unable to keep up, affordability will become more of a challenge in the coming months.”

While experts say annual rent growth was positive in all 50 major metros for the first time since April, the average typical Phoenix rent price increased by 23.1% year-over-year to $1,746.

Average rent prices in metro Phoenix are now more than 10% higher than projected rent levels for July based on pre-pandemic trends, along with nine other major markets.

Nationally, inventory increased for the third consecutive month after falling from August 2020 to April.

In metro Phoenix, houses on the market rose 1.6% from June, however, remains down 18.8% compared to last July, the report said, with more inventory expected to appear in the market over the next few months.

Buyers might be pleased to hear the share of houses listed with a price cut was at 10%, up 2.1% from June.

As inventory signs continue to rise for the third straight month and home value appreciation decreasing in nearly half the markets, Bauchaud said, “All signs point to the likelihood that the housing market is beginning to ease off the gas pedal.”

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