The U.S. housing market has undergone significant changes in the five years since the onset of the COVID-19 pandemic. According to new data from Zillow, home values have surged by an impressive 45.3%, packing over a decade’s worth of growth into just five years. Miami has seen the most substantial increase in both home values and rents, while cities like Tampa and Hartford also rank among the top for price growth.
Austin, Texas, experienced the most dramatic market swings. Home values surged by 40.3% in 2021, only to cool off as mortgage rates rose and new construction increased supply, with prices dropping 14% by mid-2023. However, Austin’s home values remain 37.8% higher than pre-pandemic levels.
In New York City, rents have climbed by 24.1% since early 2020, with areas like the Bronx seeing an even sharper increase. As affordability in Brooklyn and Manhattan decreased, renters have been pushed to consider more affordable alternatives in surrounding neighborhoods.
The pandemic also led to a significant rise in million-dollar homes, with nearly a million more homes crossing the $1 million threshold, bringing the total number of such properties to approximately 1.65 million.
Shifting Buyer Preferences
The pandemic reshaped buyer preferences, with functionality now prioritized over aesthetics. Outdoor features, such as kitchens, pizza ovens, and bluestone patios, are in high demand, with buyers willing to pay 2% more for homes with these amenities. Even in New York City, rental searches for outdoor spaces surged by 128% in 2024.
However, some pandemic-inspired trends proved short-lived. The “cloffice” (closet-turned-office) saw a rapid decline in popularity, appearing in half as many listings by the end of 2023. Other trends, such as backyard office sheds and designated spaces for exercise bikes, also saw a decrease in demand.
The Rise of Virtual Home Shopping
Virtual home touring technology has transformed the home-buying process. Since late 2022, the share of Zillow listings featuring a 3D Home tour has quadrupled, allowing buyers to better understand a property’s layout before visiting in person. This shift has made virtual tools increasingly important, with 70% of buyers reporting that 3D tours give them a better sense of space compared to static photos—up from 52% in 2019.
As a result, more buyers are seeking listings with 3D tours (62% in 2024 compared to 46% in 2019), and fewer are attending multiple open houses or private tours. The number of buyers attending five or more open houses has dropped from 17% in 2020 to just 7% in 2024, while private home tours have seen a similar decline.
These shifts suggest that digital tools will continue to play a significant role in the home-buying process, offering buyers better insights and more efficient ways to explore potential homes.
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