When Zillow debuted in 2006, the fledgling site bore little resemblance to the real-estate behemoth it is now. There were no options to find an agent, get a mortgage, or request a tour — the search portal couldn't even tell you which homes were actually for sale. There was, however, the Zestimate: a "free, unbiased valuation" for 40 million houses around the US, based on a proprietary algorithm. Half the single-family homes in America suddenly had a dollar figure attached to them, and anyone could take a peek. Zillow's site crashed within hours as a million people raced to ogle at the results.

The initial rush was a sign of things to come. Nowadays, the Zestimate is arguably the most popular — and polarizing — number in real estate. An entire generation of homeowners doesn't know life without the algorithm; some obsessively track its output as they would a stock portfolio or the price of bitcoin. By the time a seller hires a real-estate agent, there's a good chance they've already consulted the digital oracle. For anyone with even a passing interest in the housing market, the Zestimate is a breezy way to take the temperature. Keep tabs on mortgage rates all you want, but they can't tell you that your house has appreciated 20% over the past year, or that your annoying coworker's property is worth more than yours.

Many industry insiders, however, regard the number as a starting point at best and dangerously misguided at worst. Real-estate agents recount arguments with sellers who reject their pricing advice, choosing instead to take the Zestimate as the word of God. One meme likens its disciples to adults who still believe in Santa. Zillow itself lost hundreds of millions of dollars during the pandemic when it relied on its algorithm to buy homes at what turned out to be inflated prices, part of an ill-fated attempt to flip homes at scale.

The Zestimate is just one of a slew of automated valuation models that are increasingly used by banks, investors, and laypeople to estimate the value of homes. No other model, however, has wormed its way into our culture like the Zestimate. The model, like other consumer-facing AVMs, is prone to errors that render it more of an amusement than a serious pricing tool. But while the algo's price-guessing skills may be suspect, it's undeniably elite at one thing: luring people to Zillow-dot-com.

The Zestimate is both everywhere and an enigma. About 104 million homes, or 71% of the US housing stock, have a little dollar figure hovering above them on Zillow's website. One of them is the house in Austin where I was raised until the age of 10. It's not for sale, but right underneath the address, in bold, is the Zestimate. Next to it is a "Rent Zestimate," or the amount the owner could probably charge a tenant each month. You can click to see a graph of its Zestimate over the past decade — the Zillow-fied value of my childhood home rose a staggering 72% from May 2020 to its peak in May 2022 but has since dropped 24% from that top tick thanks to the chill running through the Austin market. In just the past 30 days, the Zestimate has dropped by $4,455. Ouch.

Just how accurate are those numbers, though? Until the house actually trades hands, it's impossible to say. Zillow's own explanation of the methodology, and its outcomes, can be misleading. The model, the company says, is based on thousands of data points from public sources like county records, tax documents, and multiple listing services — local databases used by real-estate agents where most homes are advertised for sale. Zillow's formula also incorporates user-submitted info: If you get a fancy new kitchen, for example, your Zestimate might see a nice bump if you let the company know. Zillow makes sure to note that the Zestimate can't replace an actual appraisal, but articles on its website also hail the tool as a "powerful starting point in determining a home's value" and "generally quite accurate." The median error rate for on-market homes is just 2.4%, per the company's website, while the median error rate for off-market homes is 7.49%. Not bad, you might think.

But that's where things get sticky. By definition, half of homes sell within the median error rate, e.g., within 2.4% of the Zestimate in either direction for on-market homes. But the other half don't, and Zillow doesn't offer many details on how bad those misses are. And while the Zestimate is appealing because it attempts to measure what a house is worth even when it's not for sale, it becomes much more accurate when a house actually hits the market. That's because it's leaning on actual humans, not computers, to do a lot of the grunt work. When somebody lists their house for sale, the Zestimate will adjust to include all the new seller-provided info: new photos, details on recent renovations, and, most importantly, the list price. The Zestimate keeps adjusting until the house actually sells. At that point, the difference between the sale price and the latest Zestimate is used to calculate the on-market error rate, which, again, is pretty good: In Austin, for instance, a little more than 94% of on-market homes end up selling for within 10% of the last Zestimate before the deal goes through. But Zillow also keeps a second Zestimate humming in the background, one that never sees the light of day. This version doesn't factor in the list price — it's carrying on as if the house never went up for sale at all. Instead, it's used to calculate the "off-market" error rate. When the house sells, the difference between the final price and this shadow algorithm reveals an error rate that's much less satisfactory: In Austin, only about 66% of these "off-market Zestimates" come within 10% of the actual sale price. In Atlanta, it's 65%; Chicago, 58%; Nashville, 63%; Seattle, 69%. At today's median home price of $420,000, a 10% error would mean a difference of more than $40,000.

Without sellers spoonfeeding Zillow the most crucial piece of information — the list price — the Zestimate is hamstrung. It's a lot easier to estimate what a home will sell for once the sellers broadcast, "Hey, this is the price we're trying to sell for." Because the vast majority of sellers work with an agent, the list price is also usually based on that agent's knowledge of the local market, the finer details of the house, and comparable sales in the area. This September, per Zillow's own data, the typical home sold for 99.8% of the list price — almost exactly spot on. That may not always be the case, but the list price is generally a good indicator of the sale figure down the line. For a computer model of home prices, it's basically the prized data point. In the world of AVMs, models that achieve success by fitting their results to list prices are deemed "springy" or "bouncy" — like a ball tethered to a string, they won't stray too far. Several people I talked to for this story say they've seen this in action with Zillow's model: A seller lists a home and asks for a number significantly different from the Zestimate, and then watches as the Zestimate moves within a respectable distance of that list price anyway. Zillow itself makes no secret of the fact that it leans on the list price to arrive at its own estimate.

Other sites have their versions of the Zestimate, too — there are actually about 25 different AVMs in the market, says Lee Kennedy, the founder and managing director of AVMetrics, a company known for independently testing these models. Realtor.com will show you three estimates, each from a different AVM provider. Redfin, a Zillow competitor, also has its own model. Kennedy has been studying AVMs for more than three decades, but it wasn't until the advent of Zillow that the masses became aware of them. Consumer-facing AVMs, like the Zestimate or the Redfin Estimate (Restimate?) are meant to be used informally, he says, as casual starting points before consulting real experts. They're not supposed to be used for real pricing, which should be left to the big guys — the "business-to-business" AVMs used by banks, investors, and the government-sponsored enterprises Fannie Mae and Freddie Mac. Lauryn Dempsey, a real-estate agent in the Denver area, gives similar advice to her clients.

"They're tools that provide information," Dempsey says, "but they should not be used in a vacuum to make decisions."

The business-to-business models are so costly to develop, Kennedy tells me, that they'll probably never be offered to regular people for free. But his testing indicates they're much more reliable. His firm has unveiled blind testing that looks at how models perform before taking into account the list price, a method that penalizes those aforementioned bouncy algorithms. The standard measurement breaks down how often the model can get within 10%, in either direction, of the actual selling price. In a highly urbanized area with lots of housing transactions, some of the models can correctly get close to the final selling price about 80% to 90% of the time — "not bad," Kennedy says. AVMs of all kinds work best in areas with a lot of homes that look and feel roughly the same. Cookie-cutter suburbs are heaven; areas with a wide range of home styles and ages, like Boston, pose a greater challenge. The value of a ranch home in the middle of nowhere is even tougher to peg.

So the Zestimate isn't exactly unique, and it's far from the best. But to the average internet surfer, no AVM carries the weight, or swagger, of the original. To someone like Jonathan Miller, the president and CEO of the appraisal and consulting company Miller Samuel, the enduring appeal of the Zestimate is maddening. "When you think of the Zestimate, for many, it gives a false anchor for what the value actually is," Miller says.

Miller is no unbiased observer. Given that he's an appraiser who estimates the value of homes for a living, it should come as no surprise that he's siding with the humans over the robots. But he raises real issues, highlighting the disconnect between the public's continued use of the Zestimate and its actual track record.

I could say that I virtually stalked my childhood home for "research," but let's be real: By the time I scrolled to the bottom of the page, I had fully surrendered to the voyeuristic urges that draw millions of visitors to the Zillow website each month. It's been almost two decades since I've stepped inside the house, and I can only imagine the changes its new owners have made to my old room (sadly, no pics of the interior). But with the aid of Zillow, my trip down memory lane was lined with data: I walked away with intimate knowledge of the home and its occupants. Prior to 2006, no regular person had this kind of power.

The launch of Zillow spawned a whole genre of internet snooping that, if anything, has only intensified in the years since. When I call up John Wake, a former economist and real-estate agent who now writes the newsletter Real Estate Decoded, he reveals that he, too, looked up his childhood home only a few months ago. "That part is really fun," he tells me. Keeping tabs on your own Zestimate, though, can provide less of a thrill. In December 2022, after interest-rate hikes tamped down home prices, Wake shared with his followers on X that his Zestimate was down 18% from May: "YIKES!" In a 2020 column, the Wall Street Journal editor Kris Frieswick opened up about the difficulty of quitting the algorithm: "My self-worth is defined by my Zestimate. Each day I approach Zillow.com filled with hope, and fear." The column reads mostly as tongue-in-cheek, but plenty of people take their number very seriously. As Frieswick pointed out, at least several disgruntled homeowners have actually sued Zillow over Zestimates they said were inaccurate.

Looking up other people's houses, by comparison, is a mostly harmless pastime. Bosses, neighbors, lovers, and exes — all are fair game in the all-seeing eyes of the tool. During the heat of the 2021 homebuying frenzy, a "Saturday Night Live" sendup of a Zillow ad declared: "The pleasure you once got from sex now comes from looking at other people's houses." The skit, which featured a lot of moaning and sultry mood lighting, was mostly about the fantasies of browsing homes for sale on Zillow — as one YouTube commenter observed, "They didn't even get into the naughty pleasure of looking up all your friends' Zestimate values." This kicked off a thread of others chiming in with "guilty!" and lots of cry-laughing emojis. "OMG I thought this was just my kink," another person replied. I imagine all of these people at a raucous dinner party, bonding over their exploits on zillow.com. And here I am, the buzzkill in the corner talking about median error rates.

Virtual spelunking aside, the hazards of the Zestimate are most obvious when a seller actually decides to list their home. Francine Carstensen, a real-estate agent in Alabama, says those in her line of work have a complicated relationship with the Zestimate: "We love it, and we hate it." A lofty estimate might jolt a homeowner into action — "I could sell my house for what?!" — and drive more business her way. But the number can also make it hard to do her job. A few times, she tells me, she's lost clients over a pricing disagreement involving the Zestimate. It can be difficult enough to pry a seller away from their unrealistic expectations without a number on a screen confirming their hopes for a bigger payday.

"I hate it when they tell me, 'Well, this is what Zillow tells me my house is worth,'" Carstensen says. "Because it's very rarely accurate."

Accuracy may not even be the point. It didn't appear to be in 2006, when the beta version of the Zestimate launched. "The Zestimate started out fairly inaccurate, but it didn't matter," Rich Barton, a Zillow cofounder who was then its CEO, recalled in a 2021 podcast episode. "It was provocative." Spencer Rascoff, another cofounder and former CEO, sold his own home in 2016 for 40% less than its Zestimate. The next year, the company offered $1 million to whoever could improve the Zestimate algorithm the most. The winning team, a group of three data scientists working remotely from the US, Canada, and Morocco, beat the Zillow benchmark by 13%.

No misstep appeared more damning, however, than the implosion of Zillow's homebuying business. In 2018, the company launched Zillow Offers, making all-cash offers to sellers looking to move quickly and seamlessly. In theory, Zillow could then turn around and offload the home in short order for a modest fee, plus however much the home had appreciated. The company used a combination of internal algorithms and human analysts to value the home and predict what it could sell for in a few months — in some cases, homeowners could get an immediate cash offer based on their Zestimate with just a few clicks. But the company's forecasts turned out to be way off base. Zillow Offers squandered $422 million in the third quarter of 2021 alone — a Business Insider investigation found that almost two-thirds of the homes listed by Zillow in Atlanta, Phoenix, Dallas, Houston, and Minneapolis were being marketed at a loss. Amanda Pendleton, a Zillow spokesperson, tells me it was the volatility of the market, not the Zestimate, that really led to the program's downfall. Once the losses came to light, the company swiftly shuttered the division and laid off a quarter of its staff.

I remember wondering whether this would be the death knell for the Zestimate, a kind of algorithm-has-no-clothes moment. I was wrong. Zillow and its best-known creation haven't gone anywhere — the company continues to highlight its progress, providing periodic updates as its data scientists tinker away at the formulas. As search portals like Homes.com and Redfin jockey with Zillow for dominance, the Zestimate is too valuable of an asset to give up. People still flock to Zillow for those little numbers next to each home, for the thrill of feasting their eyes upon something that, like salaries, is considered taboo to talk about in person. For Zillow, that's an unequivocal win.

"It's 100% a marketing tool," says Mike DelPrete, a scholar-in-residence at the University of Colorado Boulder who studies the intersection of tech and real estate. "Like, not even 99%. It's a marketing tool."

James Rodriguez is a senior reporter on Business Insider's Discourse team.

• The US housing market might be much more friendly to homebuyers in 2025.
• Home sales should rise significantly as inventory grows and prices inch higher.
• Here are 10 real-estate markets that could see a surge of activity next year.

Homebuyers should stock up on champagne — and not just for New Year's Eve.

Next year may present long-awaited opportunities for aspiring property owners to trade their apartments for homes, or for families to get the upgrades they've been pining for. There's a growing sense among real-estate analysts that an extended home sales contraction will snap in 2025 as housing inventory rises and mortgage rates fall.

"Homebuyers will have more success next year," said Lawrence Yun, the chief economist at the National Association of Realtors, in a statement about the firm's 2025 outlook. "The worst of the affordability challenges are over as more inventory, stable mortgage rates, and continued job and income growth pave the way for more Americans to achieve homeownership."

Housing market transactions will soar 7% to 12% in the year ahead to 4.5 million units before an even larger 10% to 15% jump in 2026, according to the NAR. New home sales are expected to climb 11% next year and 8% the year after.

Earlier this month, real-estate brokerage titan eXp Realty's CEO told Business Insider that sales could advance 10% in 2025, though Realtor.com called for a comparatively modest 1.5% gain.

But a home sales boom seems plausible, based on what should be healthy supply and demand.

That inventory uptick will keep property price growth in check at only 2% in each of the next two years, the NAR predicted, which would translate to a median existing-home price of $410,700. And buyers may also move off the sidelines as mortgage rates drift toward 6% from around 7%, the firm added.

"If rates stabilize around 6%, about 6.2 million households can once again be able to afford median-priced homes, compared to the current constraints with rates near 7%," the NAR noted.

Slower home-price growth and lower mortgage rates will go a long way toward easing the affordability crisis that has plagued the US since the pandemic. Just over a year ago, buyers suffered through the least affordable quarter since 1985. That may soon be a distant memory.

10 hot real-estate markets

Home sales should surge across the US next year, especially in a healthy economy with solid job gains. However, researchers at the NAR expect certain cities to be far busier than others.

Buyers will flock to 10 top housing markets in 2025 due to a combination of rising home supply, manageable mortgage rates, and healthy local economies, the firm said. Healthy demand should underpin further home-price appreciation for owners in those metropolitan areas.

These soon-to-be-hot markets share several similarities, including strong property price growth since the pandemic, a sizable supply of starter homes, positive net migration, and an outsized share of out-of-state movers who are buying homes. Other factors were a market's job growth, mortgage rates, how long most homeowners had been there, and the share of millennial renters who could buy. The NAR outlined its full methodology for this exercise in a press release.

Below are the 10 real-estate markets that the NAR is bullish on next year, along with select economic and demographic considerations.

Along with each metro area is its home price growth in the last five years, starter homes as a share of total inventory, the share of homeowners who've been in place for more than 16 years and therefore may be ready to sell, net migration ratio, the share of out-of-state movers purchasing homes, job growth since late 2019, and commentary from the NAR.

1. Boston, Massachusetts

Price appreciation history: 51.5%

Starter homes as share of inventory: 41.1%

Share of long-term homeowners: 10.2%

Net migration to population ratio: 0.1

Share of out-of-state purchasers: 18.8%

Job growth history: -0.2%

Commentary: "Boston's housing market is expected to see significant benefits from stabilizing mortgage rates. With fewer locked-in homeowners, the impact of the 'lock-in effect' may lessen in the coming year as rates stabilize near 6%, encouraging more homeowners to sell and easing inventory constraints in this supply-tight market. Additionally, Boston's mortgage rates have been relatively lower than the national average, which provides a competitive edge in today's challenging financing environment. A lower rate could help mitigate some of the affordability pressures. Surprisingly, Boston has also a larger proportion of starter-homes, with about 41% of the owner-occupied units valued below $550,000."

2. Charlotte, North Carolina

Price appreciation history: 72.8%

Starter homes as share of inventory: 72.8%

Share of long-term homeowners: 46.9%

Net migration to population ratio: 1.4

Share of out-of-state purchasers: 23.5%

Job growth history: 10.1%

Commentary: "With an impressive 10% job growth over the last five years and strong migration gains, Charlotte's economy and housing market are poised for continued growth. More than 11% of the households are set to reach the age of 35 to 40 within the next five years, ensuring sustained demand for housing. Prospective buyers in Charlotte also benefit from a wider range of affordable options, as 43% of homes fall within the starter-home category (priced less than $324,000), making the market particularly appealing to first-time buyers and young families."

3. Grand Rapids, Michigan

Price appreciation history: 64.4%

Starter homes as share of inventory: 39.6%

Share of long-term homeowners: 50.7%

Net migration to population ratio: 0.2

Share of out-of-state purchasers: 38.7%

Job growth history: 3.1%

Commentary: "Grand Rapids offers a unique combination of affordability and promising long-term prospects. With 36% of Millennial renters able to afford homeownership and 12% of households entering prime homebuying age within the next five years, the demand for housing will remain strong. A smaller proportion of originations with rates below 6%, compared to the national level, suggests a reduced 'lock-in effect,' which could lead to more inventory in this area. Additionally, the availability of starter-homes allows newcomers to purchase a home and establish roots, making Grand Rapids a standout market for 2025."

4. Greenville, South Carolina

Price appreciation history: 68.8%

Starter homes as share of inventory: 42.2%

Share of long-term homeowners: 49.7%

Net migration to population ratio: 1.7

Share of out-of-state purchasers: 43%

Job growth history: 8%

Commentary: "Greenville stands out as the area that checks off the most criteria on NAR's top 10 list. This area particularly benefits from a strong net migration rate and affordability. The metro's average mortgage rate of 6.9% in 2023 is well below the national average, providing additional relief for buyers. With 42% of homes categorized as starter homes and 43% of movers purchasing homes, Greenville offers accessibility and stability for families and young professionals alike."

5. Hartford, Connecticut

Price appreciation history: 62.8%

Starter homes as share of inventory: 38.7%

Share of long-term homeowners: 58.1%

Net migration to population ratio: 0.3

Share of out-of-state purchasers: 45%

Job growth history: 0.2%

Commentary: "Hartford offers a favorable financing environment, with an average mortgage rate of 6.5% in 2023 — one of the lowest among the top markets — enhancing affordability for buyers. Additionally, Hartford holds the highest proportion of homeowners surpassing the area's average tenure of 17 years, indicating a potential increase in local inventory, which could help alleviate supply constraints."

6. Indianapolis, Indiana

Price appreciation history: 60%

Starter homes as share of inventory: 41.7%

Share of long-term homeowners: 48.5%

Net migration to population ratio: 0.5

Share of out-of-state purchasers: 21.7%

Job growth history: 9.3%

Commentary: "Indianapolis earned a spot on the list due its strong job growth and housing affordability, which continue to attract new residents and foster a stable demand for housing. Nearly 42% of the housing stock is priced below $236,000, making the market especially appealing to first-time buyers and young families. With fewer 'locked-in' homeowners than the national level, this area is likely to see more available inventory as mortgage rates stabilize around 6% next year."

7. Kansas City, Missouri/Kansas

Price appreciation history: 59.9%

Starter homes as share of inventory: 41%

Share of long-term homeowners: 50%

Net migration to population ratio: 0.3

Share of out-of-state purchasers: 25%

Job growth history: 4.8%

Commentary: "Kansas City is one of the few areas with both a lower average mortgage rate and smaller share of locked-in homeowners, creating favorable conditions for financing and increased inventory. This area is also one of the most affordable markets for Millennial renters, with one in three of them able to afford homeownership. This affordability, combined with its competitive financing environments, makes Kansas City a key player among top-performing housing markets in the coming year."

8. Knoxville, Tennessee

Price appreciation history: 90.9%

Starter homes as share of inventory: 42%

Share of long-term homeowners: 52.9%

Net migration to population ratio: 1.6

Share of out-of-state purchasers: 48.9%

Job growth history: 8.8%

Commentary: “Knoxville made up the top 10 list due to its strong migration gains and the appeal it holds for new residents seeking long-term stability as nearly 50% of movers in Knoxville chose to purchase a home. The impact of the ‘lock-in effect’ is expected to be less pronounced here, as fewer borrowers hold mortgages with rates below 6%. At the same time, homeowners in Knoxville have built substantial wealth, with home prices now nearly double their pre-pandemic levels. This combination of strong migration, high homeownership among movers, and significant wealth gains makes Knoxville a market with strong potential in 2025.”

9. Phoenix, Arizona

Price appreciation history: 72.3%

Starter homes as share of inventory: 39.3%

Share of long-term homeowners: 42.5%

Net migration to population ratio: 0.7

Share of out-of-state purchasers: 35.8%

Job growth history: 11.9%

Commentary: "Phoenix has become a key destination for residents migrating from California, driven by its comparatively lower cost of living and housing affordability. This migration is further supported by Phoenix's strong job growth, which has expanded by 12% in the last five years. This combination of demographic shifts and economic expansion has established Phoenix as a prosperous and dynamic market."

10. San Antonio, Texas

Price appreciation history: 44.8%

Starter homes as share of inventory: 40.5%

Share of long-term homeowners: 48.5%

Net migration to population ratio: 1.3

Share of out-of-state purchasers: 39%

Job growth history: 10.7%

Commentary: "The Texas Triangle couldn't be left off this list. Borrowers in San Antonio were able to secure mortgage rates well below the national average in 2023, at 6.4%. This suggests that buyers in the area benefit from a combination of local market dynamics that lead lenders to assess lower risk in this area. Additionally, San Antonio has experienced one of the strongest rates of job creation since pre-pandemic levels, which continues to draw new residents to the area."

• Inditex sales grew 9% in five weeks to December 9, the start of the traditional holiday shopping period.
• Shares fell over 7% on Wednesday off the back of the results, which missed analyst expectations.
• Analysts at Deutsche Bank called the results "disappointing" in a note to clients.

Zara's parent company, Inditex, reported Wednesday that sales grew 9% in the five weeks to December 9, compared with 14% in the same period in 2023.

Shares in the Madrid-listed fashion giant — which also owns Bershka and Massimo Dutti — dropped as much as 7% on Wednesday after it missed analyst estimates.

Sales during the start of the holiday shopping period, including Black Friday and Cyber Monday, were also lower than 10.5% growth reached in the first nine months of 2024.

"Inditex continued with a very robust operating performance due to the creativity of the teams and the strong execution of the fully integrated store and online business model," the company said in its earnings statement.

Net income rose 8.5% to €4.4 billion ($4.62 billion) in the nine-month period, falling below the €4.52 billion ($4.74 billion) forecast by analysts.

Operating income and gross margin also lagged behind estimates in the third quarter.

In a note on Wednesday morning, Deutsche Bank analysts said the results would likely be viewed as "disappointing."

"The group's impressive growth credentials look confirmed," Jefferies analysts led by James Grzinic, head of luxury and retail, said in a note to clients. "But the shares likely needed a better print to prevent some profit-taking today."

Zara was previously thriving in a post-pandemic world. As luxury retailers like LVMH — which owns Louis Vuitton and Christian Dior — and Kering — the parent company of Gucci and Saint Laurent — saw sales slow as aspirational customers became increasingly strapped for cash, Zara reaped the rewards.

Middle-income earners who were priced out of luxury brands headed to Zara instead for their fashion fix, favoring its lower price point and ongoing reputation for quality. Sales were up by 10% over the course of 2023.

• Fixer-uppers aren't the bargain they once were.
• Older homes are now nearly as expensive as new builds.
• The housing shortage and high mortgage rates have reduced existing home inventory.

If you're looking for a deal in the homebuying market, you might want to ditch the fixer-upper and spring for a brand-new home.

For the last half-century, newly-built homes in the US have sold for much more, on average, than older homes. But these days, new homes for sale are less expensive per square foot than existing homes. Overall, newly constructed homes are selling for just 3% more than older homes, down from an average of 16% more since 1968, The Wall Street Journal reported.

Prices for existing homes have risen as fewer of them are on the market. The inventory of existing homes being resold has fallen significantly in recent years. As of March 2024, the number of existing homes for sale had fallen to 1.1 million from 1.7 million in 2019, and sales of existing homes hit a near 30-year low last year, a Harvard report found earlier this year.

High mortgage rates could be exacerbating that shortage of existing homes, as many homeowners are putting off a move and waiting for the cost of a home loan and home prices to come down.

But this trend might be turning around. Sales of existing homes are on the rise in the Midwest, South, and West, the National Association of Realtors recently reported. "The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions," NAR chief economist Lawrence Yun said in a statement.

As rates fell slightly this year, more homeowners put their homes up for sale and new home construction rose. The US is on track to build a record number of new multifamily units this year — about 500,000 Still, there's a long way to go to make up for the overall shortage in housing, which Freddie Mac recently reported was 3.7 million homes.

There are a slew of other factors at play, as well. The costs of building materials and construction labor are elevated, which makes repairing or renovating older homes much more expensive. And it doesn't help that US homes are older than ever. The median age of owner-occupied homes in the US has risen to 40 from 32 when the housing market collapsed in 2008.

New homes are getting smaller, too. The typical new build for sale in the first quarter of 2024 was 2,140 square feet, down from 2,256 square feet a year prior, according to Census data. Newly built homes peaked in size in 2015 at 2,689 and have been shrinking quite steadily since then. The share of newly constructed single-family homes with four bedrooms fell to 33% last year, the lowest level since 2012, the National Association of Homebuilders found. Meanwhile, the share of new single-family homes with two bedrooms or fewer grew to its highest level in that same period.

Did you choose between a new and an older home when purchasing? Share your story with this reporter at [email protected].

• A Pew Research Center analysis shows the largest occupations for young US workers without degrees.
• Men often work as drivers or in construction, while women work in customer service or nursing roles.
• College enrollment rates have declined in recent years.

Customer service representatives and truck drivers are the most common jobs for young women and men without a four-year degree, respectively.

Men and women between the ages of 25 and 34 who don't have college degrees also work as construction laborers, health aides, cashiers, and chefs, per a Pew Research Center analysis published in July.

There was little overlap in the most common jobs for young men and women without a college degree, but the two groups did share two roles: first-line supervisors of sales workers and retail salespersons.

Roles like these have become particularly prevalent for men, whose college enrollment rates have fallen behind women's in recent years.

Forty-seven percent of US women between the ages of 25 and 34 have a bachelor's degree compared to 37% of men, per a Pew analysis published in November. However, overall college enrollment rates have fallen in recent years: The share of male high school graduates between the ages of 16 and 24 enrolling in college has declined to 58% as of 2023 from 67% in 2018, per the Bureau of Labor Statistics. Young women's enrollment rate has declined to 65% from 71% over this period.

Many of these young people are seeking jobs that don't require a college degree, and some have benefited from companies dropping degree requirements. The share of US job postings that require at least a college degree has fallen to 17.8% from 20.4% in 2019, according to an Indeed report published earlier this year. To be sure, many employers still prioritize hiring workers with a college diploma.

The Pew report published in July also highlighted the most common job categories for Americans with a four-year college degree. Four occupation categories were among the 10 most common jobs for both men and women: software developers, managers, accountants and auditors, and elementary and middle school teachers.

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I hope everyone survived the weekend shopping experience and no one was eaten by ravening bands of deal-hunting nomads as they trekked through Macy's, or whatever people who actually go outside on Black Friday have to endure. Things are mostly quiet here at the Ars Orbiting HQ—the gift shop on the mess deck is still selling mugs and other merch, if anyone wants some Ars stuff!—but the e-commerce communications panel is beeping and it says we've got more deals to show you guys for Cyber Monday!

Cyber Monday is the thing that happens after Black Friday, where the deals keep going past the weekend and erupt into the next week, like some kind of out-of-control roller coaster of capitalism careening off the rails and into the crowd. Headphones! Power stations! Tablets! More board games! We've got so many things for you to buy!

A couple of quick notes: First, we're going to continue updating this list throughout Monday as things change, so if you don't see anything that tickles your fancy right now, check back in a few hours! Additionally, although we're making every effort to keep our prices accurate, deals are constantly shifting around, and an item's actual price might have drifted from what we list. Caveat emptor and all that.

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The momentum of Thanksgiving — which saw consumers spend a record $33.6 billion spent globally online on the day — looks like it continued into Black Friday, with a bang. Adobe said that in the U.S., consumers made a record-breaking $10.8 billion of purchases, up 10.2% on last year. Meanwhile, Salesforce is giving a much […]

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The leaves have turned, the turkey has been eaten, the parades are over, and the football has been watched—the only thing left to do is to try to hide from increasingly uncomfortable family conversations by going out and shopping for things! It's the holiday tradition that not only makes us feel good, but also (apocryphally) drags the balance sheets of businesses the world over into profitability—hence "Black Friday!"

Our partners in the e-commerce side of the business have spent days assembling massive lists for you all to peruse—lists of home deals and video game deals and all kinds of other things. Does that special someone in your life need, like, a security camera? Or a tablet? Or, uh—(checks list)—some board games? We've got all those things and more!

A couple of quick notes: First, we're going to be updating this list throughout the weekend as things change, so if you don't see anything that tickles your fancy right now, check back in a few hours! Additionally, although we're making every effort to keep our prices accurate, deals are constantly shifting around, and an item's actual price might have drifted from what we list. Caveat emptor and all that.

Read full article

Comments

Thanksgiving weekend has long been seen as the traditional start of the most important sales period for retailers, and so far, the indication is that we’re in for a strong holiday season for e-commerce. Salesforce is tracking activity in real time and said that yesterday, Thanksgiving, generated $33.6 billion in sales online globally, up 6%. […]

© 2024 TechCrunch. All rights reserved. For personal use only.

• Shoppers are willing to spend this holiday season, but many are still budget-conscious.
• Lower inflation — and even deflation — gives some shoppers more money to spend on gifts and parties.
• Others might go into debt to make their holiday dreams come true.

Shoppers appear ready to spend this holiday season, but many aren't giving up the search for bargains just yet.

Multiple signals suggest that some shoppers feel less pinched financially as the biggest shopping season of the year ramps up. US retail sales for October came in slightly above expectations, and prices for many items — including gifts themselves and many essentials, such as gas — are increasing at their lowest rates in a few years.

But customers can still recall that prices were lower four or five years ago, Claire Tassin, a retail and e-commerce analyst at Morning Consult, told Business Insider. As such, many are looking for good deals, as they have been for much of this year, while still spending on the holiday season.

"There is still that desire to find lower-cost alternatives where possible," Tassin said.

Retailers and consumer brands reported this summer that shoppers — even affluent ones — were pulling back on their spending as prices remained high.

Many consumers didn't stop, however. Rather, they tried to get more for their money — think shopping for clothes at an off-price store like Nordstrom Rack instead of one of the retailer's department stores, for instance.

According to a Bank of America Institute report published last week, there are some signs that consumer conditions have improved since then.

The University of Michigan's Consumer Sentiment Index has been inching up since July. In October, the measure hit its highest mark since April. Credit card spending in states affected by Hurricanes Helene and Milton rebounded in the weeks after the storms in October, the report said.

And over the last few months, inflation has slowed on some essential goods, such as groceries, and even turned into deflation in others, such as gasoline, according to the report. Theoretically, that means shoppers have more money to spend on discretionary purchases, such as eating out and buying gifts.

"Is the apparent strengthening in consumer spending temporary? Potentially, but there are reasons to be optimistic," the report reads.

Friday's retail sales growth showed "a good early step forward into the holiday shopping season," National Retail Federation Chief Economist Jack Kleinhenz said. Sales were up 0.4% on a seasonally adjusted basis year-over-year in October, according to the US Census Bureau. The Bureau also revised its September sales figure upward.

"Falling energy prices have likely provided extra dollars for household spending on retail merchandise," Kleinhenz said.

Walmart and Target, which posted differing results this week, both provided evidence that consumers are still spending — if cautiously — going into the holidays.

Walmart CEO Doug McMillon said Tuesday that the chain gained share as shoppers with household incomes over $100,000 kept visiting its stores. Shoppers "continue to seek value to maximize their budgets," CFO John Rainey said. The company raised guidance for the rest of its fiscal year.

Target, however, cut its outlook for the rest of 2024 on Wednesday after the chain said that shoppers cut back on discretionary purchases during the third quarter. Chief Commercial Officer Rick Gomez said that Target is cutting prices on 2,000 items and offering affordable gifts, such as a holiday toy selection with half of the items priced under $20.

Many prices are still higher than they were before the pandemic, said Morning Consult's Tassin said. That could push many consumers to look for value when they buy gifts or plan holiday parties this year.

But clear majorities of shoppers are willing to spend on gifts, food and beverages, and parties during the holidays this year, according to a Morning Consult survey conducted in late August and early September. Some were even willing to go into debt or cut back spending on essentials to afford their holiday plans, according to the survey results.

"People feel the financial pressure, but that doesn't necessarily mean that they're not going to spend," Tassin said, adding that people might cut back on spending in other areas to ensure they have enough for their holiday plans.

"I'm going to pay more attention to sales, or I'll buy the cheaper meat options so that I have a little bit of wiggle room to afford other things," she said.

• Some retailers are offering discounts and sales to win over inflation-weary shoppers.
• Kitchen and home retailer Williams-Sonoma is taking the opposite approach, its CEO said Wednesday.
• Discounts encourage shoppers to put off purchases, Laura Alber said.

Many retailers are trying to lure in budget-conscious shoppers with discounts and other markdowns. Not Williams-Sonoma.

The kitchen supply and home furnishings chain has actually been offering fewer discounts over the last several years, CEO Laura Alber said Wednesday on the company's earnings call.

Moving away from sales eliminates a reason for shoppers to put off buying something they like, she said. As shoppers look for discounts these days, some might delay purchases in hopes that they will be able to snag a discount later on.

Under Williams-Sonoma's strategy, "the customer doesn't have to wait to see if they're going to have a better price on that sofa in two weeks," Alber said. "They know the price is the price."

Instead, Alber said that Williams-Sonoma has focused on getting shoppers to come back by offering consistent prices and quality items. "We think we are very, very competitively priced all-in versus anyone with the same level of design and quality, which allows us to be less promotional," she said.

Sales can be attractive ways for retailers to create a temporary bump in revenue, Alber told CNBC's Jim Cramer after the company's earnings report.

"That's all good for the short-term, but then you get customers trained to wait for that promotion, which is never a good thing because you're really competing with yourself," she said.

Williams-Sonoma beat expectations for its third-quarter earnings and raised its guidance on Wednesday. Its shares closed 28% higher after the report, reaching an all-time high.

Many shoppers are focusing more on finding good deals after dealing with years of higher prices and depleting savings that they built up during the pandemic.

In response, brands from Walmart to McDonald's have lowered prices — sometimes temporarily, other times permanently — to keep customers visiting.

Williams-Sonoma carries products at various price points, from kitchen utensils sold under its store brand to Le Creuset enameled cookware. Alber said on the company's earnings call that it wants to offer "approachable prices with great quality."

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