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Home values are continuing to rise even as 2020 comes to a close according to Zillow. The company's latest Real Estate Market Report revealed that typical home value rose 1.1% from October to November and 3% over the past three months, both of which are the largest gains on record for Zillow dating back to 1996.
According to the report, home values across the U.S. increased by 7.5% year-over-year to $263,351. San Jose, Phoenix and Seattle saw the largest annual increases by metro. Inventory woes continue to help push home values up across the nation. Zillow economists are also predicting home values to increase by 3.6% in the three months ending February 2021 and 10.3% between November 2020 through November 2021.
"We expect the housing market to continue its bull run from this summer and fall well into 2021," said Zillow senior economist Jeff Tucker. "This rapid price growth will be driven by the same factors that took the steering wheel in 2020: strong demographic trends, shifts in buyer preferences sparked by the pandemic, low mortgage rates, and short supply. The millennial generation is moving into their mid-30s and bringing a wave of demand from renters looking to buy their first homes."
Zillow economists expect 5.7 million homes to be sold by the end of the year -- 5.9% more than were sold in 2019, according to the report. Next year is forecasted to be even stronger, with 6.9 million homes expected to be sold.