Home values are expected to appreciate 4.6% on a national basis by November 2014, predicts the Zillow Home Value Forecast.
National home values climbed 0.6% between October and November 2013 to $168,000, according to Zillow’s November Real Estate Market Reports. On a year-over-year basis, they were up 7.1%.
The last time national home values were at this level was in November 2004, Zillow notes.
While further appreciation is expected to occur by November 2014, it is slowing down compared to past years to a more historical rate of appreciation.
“These annual and monthly trends are in line with a board and robust housing recovery that is starting to slow down as home value appreciation rates fall back to more sustainable growth levels,” says the Zillow Real Estate Research blog. “Some markets will experience volatility in the coming years fueled by decreasing affordability, as mortgage rates rise, and increase supply of of for-sale homes, as negative equity recedes and new construction increases.”
More than three-quarters (77.1%) of the 485 metropolitan and micropolitan areas Zillow’s Real Estate Market Reports covers showed monthly home value appreciation in November, while 88% saw annual gains.
However, seven of the largest 35 metro areas exhibited monthly depreciation, with the biggest declines seen in St. Louis (down 0.8%), Indianapolis (down 0.7%), Dallas (down 0.5%), and Phoenix (down 0.3%).
On a national level, home values are still down 14% from their April 2007 peak.
Looking back on the year, Zillow says that 2013 is ending on a positive note—including the double-digit increases in home values in some markets, especially in the West.
“After a year of double-digit appreciation, home value growth in places such as San Francisco, San Jose and Phoenix will slow down, though they will still be outpacing historic norms,” said Zillow in the blog post. “Despite these slowdowns, 2014 will see more expensive homes with affordability becoming an issue in many California markets and higher mortgage rates. We expect that the 30-year fixed mortgage rates will pass the 5% mark later in 2014.”
Written by Alyssa Gerace