Real estate prices are continuing to surge in America as houses are in hot demand

• Home value growth steadily continued to increase in July 2020, the "fastest pace" since May 2019.
• Demand for homes has accelerated due to lower mortgage rates as well and changing age demographics among millennials.
• Inventory of listed homes, or the number of houses on the market, is "down 28%" at nearly 1,031,000 active listings.

The US housing market continued to make strides in the month of July, as home value growth steadily continued to increase.

The typical home price in America grew 4.5% year-over-year to $253,527 in July, according to a market report released on Thursday from real-estate database company Zillow. This marked the "fastest pace" of growth since May 2019.

Demand for homes has accelerated due to lower mortgage rates as well as changing age demographics among millennials, the report said.

"There are approximately 5 million more Americans aged 26-35 than there were 10 years ago," the report said. "For those young households who still have their jobs and savings, they may view today's low-rate environment as an opportunity to lock in an affordable mortgage payment for years to come, giving them space to start a family."

Inventory of listed homes, or the number of houses on the market, is "down 28%" at nearly 1,031,000 active listings. This total could potentially fall under 1 million homes, Zillow's data indicates. According to the company's market report, inventory has declined because of "robust sales and anemic new listings."

Furthermore, Zillow's Observed Rent Index increased just 1.2% from July 2019 to $1,749 while dropping by over 2% in the New York, San Francisco and San Jose area markets.

Earlier on Friday, Business Insider reported that US existing home sales in July increased a record 24.7% to a seasonally adjusted rate of 5.86 million as a result of both "low mortgage rates and pent-up demand." This mark was good enough for the second month in a row of record sales gains.

The housing market has seen other signs of optimism recently. The US Department of Commerce on Tuesday said that housing starts in July surged 22.6% to a seasonally adjusted 1.5 million, good for "the largest jump since October 2016."