Home price growth in the United States remains strong but is expected to slow during 2014 as the rise in vales tail off, according to the latest market report from Zillow.
Home price growth in the United States remains strong but is expected to slow during 2014 as the rise in vales tail off, according to the latest market report from Zillow.
It shows that prices were up 0.6% last month and 7.1% year on year. Home values are expected to rise another 4.6% over the next 12 months.
The growth is pretty much nationwide with nearly 90% of metros analysed showing annual appreciation. But it has slowed slightly from the 7.3% annual growth recorded in the summer.
Some 77.1% of the metros covered in the reports experienced home value appreciation between October and November, with only 95 of the 485 metro areas, or 19.6%, experiencing declines.
On an annual basis, 88% of metros experienced home value appreciation and among the 35 largest metro areas covered by Zillow, 34 experienced year on year home value increases in November, with nearly half up by double digit percentages.
Major markets where home values increased the most over the past year include Las Vegas up 30.9%, Riverside up 29.2% and Sacramento up 25%. St. Louis was the only metro area in the top 35 where home values declined year on year.
For the 12 month period from November 2013 to November 2014, national home values are expected to rise another 4.6%to approximately $176,731, according to the Zillow Home Value Forecast.
Large metro areas expected to show the most appreciation over the next year include Riverside with growth of 18.6% forecast, followed by Sacramento with growth of 11.9% and Las Vegas with growth of 10.4%.
‘The pace of home value appreciation has levelled off and is beginning to slow down, after peaking this summer. Much of this year’s rapid growth in home values can be attributed to very strong demand, as low mortgage interest rates, relatively low home prices and a slowly improving economy helped draw buyers into the market,’ said Zillow chief economist Stan Humphries.
‘Those dynamics are now giving way to more moderating influences, including rising mortgage interest rates, flagging investor demand and slowly increasing for sale inventory. This slowdown in home value appreciation will contribute to a more balanced market, and will help to ease some emerging affordability problems in a handful of very hot markets, particularly in California,’ he added.
National rents rose in November from October, up 0.3% to a Zillow Rent Index of $1,297. Year on year, national rents were up 2% in November.
The Zillow report also shows that the number of completed foreclosures in November fell to 5.09 homes foreclosed out of every 10,000 homes nationwide, down from 5.45 homes in September.