Home Values Post Biggest Annual Increase Since 2006; Rent Gains Slow
02/22/2013 By: Esther Cho
Home values in January posted their biggest annual increase since July 2006, beating national gains in rent, according to a recent report from Zillow.
The Zillow Home Value Index rose for the 15th straight month to $158,100 in January 2013. According to Zillow, national home values have not been that high since June 2004. The improvement represents a 6.2 percent year-over-year gain and a 0.7 percent increase from December 2012.
The winter season, however, slowed gains for the Zillow Rent Index, which was down 0.2 percent from December, but still 4.3 percent higher compared to a year ago.
“The winter months are typically when things cool off in the housing market, but high demand and continued tight inventory in many markets have helped keep things at a boil through the early part of 2013,” said Dr. Stan Humphries, Zillow’s chief economist.
For every 10,000 homes nationwide, Zillow reported 5.54 homes were lost to foreclosure in January, down 0.8 homes month-over-month and 2.3 homes year-over-year.
Although the pace of completed foreclosures is slowing, Humphries noted foreclosure activity remains high.
“This will have the dual effects of nurturing rental demand, as displaced former homeowners seek new lodgings, and of adding supply to many markets, as foreclosed properties re-enter the market,” Humphries explained.
Zillow also measured changes in home values and rent across the 30 largest metros.
The biggest annual gains in home prices were seen in Phoenix (21.9 percent), San Francisco (17.2 percent), San Jose (16.8 percent), Las Vegas (16.2 percent), and Sacramento (13.7 percent).
Year-over-year, rents rose the most in Denver (7.5 percent), while Charlotte and Boston posted the second-highest increase, 6.3 percent. San Jose (5.5 percent) and San Francisco (5.4 percent) took the next two spots in the top five.
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Home Values Post Biggest Annual Increase Since 2006; Rent Gains Slow
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