Home values continued trending upwards across the nation in May, according to Zillow’s most recent Real Estate Market Report, rising 5.4% on a year-over-year basis.
National home values rose 0.5% from April to May to $159,000, matching June 2004 levels.
Between May 2013 and May 2014, Zillow’s Home Value Forecast predicts a 4.1% appreciation across the nation to $165,448.
Looking at the 30 largest metro areas covered by Zillow, 29 experienced year-over-year home value increases in May, with St. Louis as the only exception. Half were up by double-digits, with the most growth seen on a yearly basis in Las Vegas (up 28%), Sacramento, Calif. (up 26.1%) and San Francisco (up 24.2%).
More than half (51%) of the 360 markets Zillow covers showed monthly home value appreciation in MAy 2013, while 72% saw annual appreciation.
National home values are still down 18.3% from their peak in May 2007, but are up 7.2% from the post-recession trough in October 2011.
Home value appreciation is expected to slow down, even though economist believe the housing recovery will stay strong.
“Enjoy it while it lasts, because the housing market will undoubtedly look very different a few years down the road from how it appears now. Inventory constraints are beginning to ease in many areas as more listings and new homes come on line, which will ultimately help end this period of rapid annual home value appreciation above 5 percent,” said Zillow Chief Economist Dr. Stan Humphries. “Additionally, as interest rates begin to rise from their historic lows, some demand may also ebb from the market as home purchases become more expensive to finance.”
Written by Alyssa Gerace