After reaching a plateau during the beginning and middle of 2015, home prices have once again continued their march upwards at a faster than normal pace, Zillow.com reports. Not only are home values once again rising quickly, but they are appreciating faster than many experts predicted. They have risen 4.9 percent of the past year to a median value of $187,000 in April.
Currently, home prices are appreciating about 3 percent faster than expected and strong home value growth has a lot to do with a very low inventory of new and existing homes for sale. Other factors at play are very high housing demand, strong wage growth and a healthy labor market, and historically low mortgage rates.
Inventory levels across the country have decreased 3.4 percent from a year ago and the number of entry-level homes, which has been particularly hard hit, is down nearly 8 percent over the past year. For anyone who is in the boat of being a first-time homebuyer or anyone who is attempting to transition back into the housing market after renting for a while, it is likely going to be difficult to do so.
Home values have not been the only thing growing, as rents across the nation also experienced an increase of 3.2 percent year-over-year in April. However, as home values have begun to appreciate more quickly, the gains in rent have actually been slowing. In mid-2015 the rate of annual appreciation was at 7 percent. The current rate of 3.2 percent is much more in line with historical averages and will hopefully allow for incomes to catch up and make saving for a down payment a little easier.
According to Zillow, home values can be expected to grow another 2.4 percent through April 2017.
For the full report and to view interactive charts and graphs, follow the link below.