A new report shows that national home values are rising at their fastest pace in 12 years, rising 8.7 percent to a median value of $215,600. According to the April Zillow Real Estate Market Report, home values have not increased this quickly since June 2006 — right before the housing bubble bust — when they were appreciating 9 percent annually before starting to decline in September 2007.
“By contrast,” the report stated, “the current gain is part of a general upward trend that started in early 2015, when values were climbing at less than 5 percent year over year. They picked up steam that summer and, aside from occasional pauses and slight declines, have not looked back.”
According to a press release, the data shows that U.S. home values are higher than ever. In 21 of the 35 largest housing markets, the values have surpassed the peak that was hit during the height of the housing boom more than a decade ago.
Zillow senior economist Aaron Terrazas said in the press release, “Home values are rising faster than we’ve seen in a very long time: The spring home-shopping season has been a perfect storm of strong demand and tight supply. Sluggish new construction has exacerbated the supply situation, and homes that are hitting the market are moving very quickly once they do. Americans are also in a spending mood, boosted by recent tax cuts and rising wages. Millennials who long delayed becoming homeowners, are out in force — a shift we’re also seeing in softer rent appreciation.”
The report shows that the fastest-growing market is San Jose, California, with its median growing more than 26 percent to $1.26 million. Las Vegas had the second fastest growing median home value as it continues to recover from the recession. Its median home value gained 16.5 percent to $260,800 in April. However, it still has not reached its pre-recession peak of $316,800 from 2006. Seattle finished off the top-three markets for median home value growth, gaining 13.6 percent to $490,000 in April.
The slowest growing major markets were in Baltimore, where the median home value increased 4.4 percent to $262,700 year over year. In addition, Washington, D.C. grew 4.5 percent to $398,900, and Houston went up 4.7 percent to $195,500.