Annual home price growth reaches highest level since 2006
Increased buyer demand and low interest rates continue to push home values up in all 50 the largest US markets, according to Zillow’s latest report
Read Marion MacPherson’s full article here: https://www.inman.com/2021/02/19/annual-home-price-growth-reaches-highest-level-since-2006/
Increased buyer demand spurred by historically low-interest rates has pushed annual home value growth to the highest level since 2006, according to Zillow’s latest market report released on Friday.
Zillow Home Value Index increased to $269,039 in December, representing the highest level of annual growth (9.1 percent) seen since 2006. The ZHVI also broke records for month-over-month growth, with it matching the previous December all-time high in 1996 (1.1 percent). Despite the boom in home prices, the January time-on-market decreased to 18 days — beating the 2019 and 2020 average of 46 days.
“Homebuying demand has pushed the pedal to the metal for price appreciation this winter,” Zillow Senior Economist Jeff Tucker said in the report. “Normally we’d be talking about the spring selling season ramping up, but it looks more like last summer’s selling season simply never ended.”
Home values increased in all of the 50 largest metros, with Phoenix (17.1 percent), San Jose (14.2 percent) and Austin (13.7 percent) leading the pack. Meanwhile, San Francisco (5.3 percent), Chicago (6.7 percent), and San Antonio (6.7 percent) reported the slowest home value appreciation.
Tucker said the increase in home values is due to “buyers eager to secure more space and lock in today’s rock-bottom interest rates,” which averaged 2.68 percent in December and 2.74 percent in January.
“[They] are having to move quickly and aggressively to win out in this competitive market,” he explained.
Zillow economists expect home values to keep climbing, with home values growing 10.1 percent by December 2021. Zillow also revised its 2021 existing home sales growth forecast to 24.8 percent, which represents an increase to 7 million sales. Tucker said the increase is “driven by improved pending sales volumes and home purchase applications.”
