August Home Values See Seven-Year High in Annual Growth
National home value appreciation continued to climb in August, up 0.4 percent from July to a Zillow Home Value Index of $162,100, according to the August Zillow Real Estate Market Reports. Home values were up 6.6 percent annually in August, the largest gain since July 2006, when home values rose 7.9 percent year-over-year. National home values have risen or remained flat month-over-month for almost two years, though the pace of monthly home value appreciation has slowed in recent months. August marked the third consecutive month in which monthly home values rose more slowly than the month prior. A majority (85 percent) of the 382 metros covered in August experienced annual home value appreciation. Among the 30 largest metro areas covered by Zillow, 20 saw annual appreciation of 10 percent or more. Metros with notable annual increases in August include Sacramento (34.1 percent), Las Vegas (30.6 percent) and Riverside, Calif. (29.7 percent). For the 12-month period from August 2013 to August 2014, U.S. home values are expected to rise another 5.2 percent, to approximately $170,500, according to the Zillow Home Value Forecastiii. Large metro areas expected to show the most appreciation over the next year include Riverside (21.9 percent), Sacramento (19.2 percent) and Los Angeles (13.2 percent). "August marked the end of one of the hottest summer home shopping seasons in years, as home value appreciation rates continued their rocket ride upward – perhaps dangerously so in some metro areas," said Zillow Chief Economist Stan Humphries. "Double-digit appreciation rates do help to lift homeowners out of negative equity and to entice sellers into a low-inventory environment, but this rapid growth is not normal and cannot and should not be expected to last. We are already beginning to see moderation in the monthly pace of home value appreciation, which will be good for the market overall and in the long term." National rents also rose in August compared with July, up 0.5 percent to a Zillow Rent Indexiv of $1,293. Year-over-year, national rents were up 1.9 percent in August. The number of completed foreclosures in August fell to 5.17 homes foreclosed out of every 10,000 homes nationwide, down from 5.27 homes in July. Foreclosure resales represented 8.28 percent of homes sold in the U.S. in August, down 0.3 percentage points from July and 3.1 percentage points from August 2012.