For the first time in years, incomes are rising faster than home values

A trend that’s helped force U.S. home ownership to a 50-year low may finally be running out of steam.

According to a new report from Zillow, a real estate and rental marketplace, incomes are now rising faster than home values for the first time since 2011. The data shows that home values have been growing at a 5 percent annual rate since the beginning of the year, outstripped by 2015’s income growth of 5.3 and 5.4 percent for family and non-family households respectively.

“We’re finally seeing income growth that we haven’t had for quite some time,” said Svenja Gudell, Zillow’s chief economist. Yet, “it’s a combination of both,” she said, when asked in an interview about the effect on house prices themselves: even their present 5 percent growth rate “is a slowdown from the early days of the recovery.”

The Federal Reserve’s wage tracker has been ticking steadily higher in recent years, with some of America’s lowest paid workers enjoying a boost to their paychecks. Federal Reserve Chair Janet Yellen said in Wednesday’s press conference that monetary policy makers expect wages to improve further in the months ahead, which could help to mend home ownership rates that recently hit their lowest levels since 1965.

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While the Fed’s keeping a close eye on incomes, its decisions also affect prices: the eventual interest rate hike which policy makers declined to make at this month’s meeting will moderate house prices further, Gudell said.”I think the chances are that the Fed raises interest rates sooner rather than later, and that will impact expensive markets,” she said.

Across the U.S., there was only one market on Zillow’s list of 35 largest metro areas where house prices exhibited a year-on-year decline – Indianapolis, with a drop of 1.6 percent. The majority of the cities seeing the biggest increases were on the west coast, with Portland, Dallas, Seattle and Denver topping the list for the sixth straight month, even if SanFrancisco and San Jose are now no longer among the fastest appreciating house markets.

While wages are outpacing home values, “it’s worth noting that they have a lot of catching up to do,” as Gudell says.