The typical U.S. home is worth over $200,000 for the first time ever, according to the June Zillow Real Estate Market Reportsi. The national median home value is now $200,400, up about 7 and a half percent since this time last year.
Home values in Seattle, Dallas-Fort Worth and Las Vegas are rising fastest, all reporting year-over-year gains in the double-digits. In Seattle, home values are up 13 percent year-over-year to a median home value of $447,100. Home values in Dallas and Las Vegas are up 10.5 and 10 percent, respectively.
High buyer demand coupled with fewer homes for sale is driving up home values across the country — there are 11 percent fewer homes on the market than a year ago, the greatest drop in inventory since July 2013. National home values have been rising at over 7 percent annually for the past five months, with many markets consistently rising in the double-digits.
Housing starts climbed 8.3 percent in June to a seasonally adjusted annual rate of 1.22 million, the Commerce Department said Wednesday. The gain ended three straight monthly declines and marked the strongest pace of building since February. Home construction has risen 3.9 percent year-to-date, but that slight increase has been unable to make up for the decrease in existing homes being listed for sale.
The median price of a new home sold in May rose 16.8 percent from a year ago to a record $345,800. Prices have been increasing as demand has outstripped supply of new homes, in part because of a shortage of available building lots.
During the height of the housing bubble over a decade ago, the median U.S. home value peaked at $196,600 but never surpassed the $200,000 threshold until now, according to Zillow..
“The national housing market remains red hot and shows no signs of slowing, even as some local markets like the Bay Area have noticeably cooled,” said Zillow Chief Economist Dr. Svenja Gudell. “But even in areas where the housing market has slowed, home values are at or very near peak levels, selection is limited, demand is high and competition is fierce. Given these high costs and high competition, the most important thing you can do is get your finances in order so you know what you can comfortably afford, and find an agent who has experience with bidding wars and will help you stand out in a competitive market, especially if you’re buying for the first time.”
San Jose, Columbus, Ohio and San Diego reported the greatest drop in inventory since this time last year. Homeshoppers in San Jose will have nearly 40 percent fewer homes to choose from than a year ago, and there are 33 percent fewer in Columbus and San Diego.
Median rent across the nation has been holding steady at about a 1 percent annual gain for the past six months — the median rent across the country is now $1,422 per month, up just over 1 percent annually. Seattle, Los Angeles and Sacramento, Calif. reported the greatest annual rent increases among the 35 largest U.S. metros. In Seattle, rents are up 5 percent to a Zillow Rent Indexii (ZRI) of $2,142 per month. Median rent in Sacramento is up 4.5 percent, and in Los Angeles, median rent has risen 4 percent.
Median rent is falling in 12 of the 35 largest U.S. metros, falling the most in Pittsburgh (down 4 percent) and Houston(down 3 percent). Miami, San Jose and San Francisco are also among the metros where rent is cheaper this year than last.
Long-term U.S. mortgage rates declined this week after two straight weeks of increases. The benchmark 30-year rate slipped back below the significant 4 percent level.
Mortgage buyer Freddie Mac said Thursday that the rate on 30-year, fixed-rate mortgages fell to an average 3.96 percent from 4.03 percent last week. It stood at 3.45 percent a year ago and averaged a record low 3.65 percent in 2016.
The rate on 15-year, fixed-rate home loans, popular with homeowners who are refinancing their mortgages, eased to 3.23 percent from 3.29 percent last week.
Mortgage rates still remain historically low even though the Federal Reserve has begun to ratchet up short-term interest rates.