HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
NewsReverse Mortgage

Annual Home Value Growth to Exceed Pre-Bubble Levels: Zillow

For the first time, the average annual growth rate for home values in the next five years looks to surpass pre-bubble levels, according to the first quarter Zillow Home Price Expectations Survey. 

Where the pre-housing bubble (1987-1999) appreciation rate was 3.6% per year, notes Zillow, a nationwide panel of 118 economists and real estate experts predicted that home values will rise an average 4.1% annually from 2013 through 2017.

Additionally, survey respondents expect home values will rise another 4.2% on average in 2014, before moderating to annual appreciation rates between 3.6% and 3.8% for 2015, 2016 and 2017. 

“The panel is quite bullish on home prices near-term, considering a pre-bubble average appreciation rate of 3.6 percent per year,” said Zillow Chief Economist Dr. Stan Humphries. “That said, their expectations are a bit shy of the home value gains of 5.5% that we saw in 2012, implying some moderation in the pace of gains.”

The panel’s outlook, says Humphries, is consistent with home value growth fueled by “tighter-than-normal” inventory of for-sale homes, as well as a robust demand for high affordability.

While the most optimistic quartile of respondents predicted a 6.1% increase in home values in 2013 on average, the most pessimistic predicted an average increase of 3%. 

Written by Jason Oliva