Home values fall in the US for first time in seven years
The median value of a home in the United States fell by 0.1% in April month on month to $226,800, the first fall in seven years, the latest index report shows.
Year on year the median home value has grown 6.1%, the fourth straight month of slowing appreciation on an annual basis, according to the figures from real estate firm Zillow.
However, rents are rising. The median US rent in April was $1,477, up 2.6% from this time last year. This is the sixth straight month that rent prices have grown.
The decline in home values was led primarily by large West Coast markets and comes after 85 straight months of gains that brought home values to record highs. Property prices have experienced declines only twice over the past few decades: during the recession of the early 1990s and the recession and housing crisis in the late 2000s.
Home values fell in 32 of the 35 largest housing markets over April and remained flat in two others. Riverside in California was the only large market that saw its home values appreciate during the month.
But this downturn has been a longer-term trend in other large California markets with prices down in at least each of the previous three months in San Jose, San Francisco, San Diego and Los Angeles.
‘The widespread decline in home value growth in April, the first in many years, will turn heads. But it’s too early to say if we’ve hit another national home value peak and are at the beginning of a sustained downturn, or if this is just a bump in the road,’ said Zillow director of economic research Skylar Olsen.
‘Month on month numbers are volatile, and this small decline could reverse itself before the year is out and before national home values go negative on a year on year basis. That said, the likelihood that home values have peaked in several local markets is real. The price correction in these areas should continue after years of significant home value growth that substantially outpaced income growth,’ Olsen added.}
Zillow says that home values have likely to have peaked in Los Angeles, Philadelphia, Houston, Miami, Boston, San Francisco, Seattle, San Diego, St. Louis, Tampa, Baltimore, Pittsburgh, Portland and San Jose.
Rent prices continued to accelerate, growing for the sixth consecutive month. The median rent rose 2.6% on an annual basis to $1,477. Rents grew the fastest in Las Vegas, up 7.8%, Phoenix up 6.7% and Orlando up 6.4%.
Inventory fell 1.7% year on year. Washington D.C. has seen the most significant drop, with 31.7% fewer homes for sale than this time a year ago. Despite the drop nationally, for sale inventory has grown significantly in expensive West Coast markets of San Jose, Seattle and San Francisco and Zillow says this is due to the cooling in demand rather than a flood of new listings.