Home prices in the United States are setting new records, gaining thousands of dollars in value every month, led by San Jose in California, new research shows.
The national median home value is $12,500 more than it was just one year ago and more than half of the nation’s largest markets are worth more than they were before the downturn of 2007, according to the latest real estate market report from Zillow.
Home values in San Jose, California, gained the most over the last year, with homes now priced some 12.3% more than they were in October 2016, an increase of.
In Seattle and Las Vegas property prices have also recorded double digit growth in the last 12 months, up 11.7% and 11.2% respectively, the data also shows.
The real estate firm explained that limited housing supply and heavy demand continue to play a role in driving up home prices. There are 11.7% fewer homes for sale in the US than a year ago.
Inventory has dropped most significantly in San Jose, San Francisco and San Diego over the past year. In San Jose, there are 60.4% fewer homes on the market than at this time last year and 32% less in San Francisco and 31% less in San Diego.
‘We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country. Home values are growing at a historically fast pace, and those potential buyers want to get in the market while they still can,’ said Zillow chief economist Svenja Gudell.
‘But with homes gaining so much value in just one year buyers, especially first time buyers, have to set aside more and more money for a down payment just to keep up with them. Unfortunately, there’s just not enough homes for sale, and demand will continue to drive prices higher until we reach a better balance between supply and demand,’ she added.
The report also shows that rents increased on an annual basis for the sixth consecutive month, with rents increasing 2.2% compared to last October.
