US property prices rising at fastest pace for 12 years

National median home values in the United States are rising at their fastest pace in 12 years, up 8.7% over the 12 months to April to $215,600, the latest index shows.

Property prices have not appreciated this quickly since June 2006, right before the housing bubble bust, when they were appreciating 9% annually, according to the data from real estate firm Zillow.

It means that prices are now higher than they have ever been, and home values in 21 of the 35 largest housing markets have surpassed peak value hit during the height of the housing boom over a decade ago.

‘Home values are rising faster than we’ve seen in a very long time: The spring home shopping season has been a perfect storm of strong demand and tight supply,’ said Zillow senior economist Aaron Terrazas.

‘Sluggish new construction has exacerbated the supply situation and homes that are hitting the market, are moving very quickly once they do. Americans are also in a spending mood, boosted by recent tax cuts and rising wages,’ he explained.

‘Millennials who long delayed becoming home owners, are out in force, a shift we’re also seeing in softer rent appreciation,’ he added.

A breakdown of the figures show that home values are appreciating the fastest in San Jose, up 26% to a median price of $1,263,900, followed by a 16.5% rise in Las Vegas and growth of 13.6% in Seattle.

The index report also shows that median rents across the nation rose 2.5% over the past year to a median payment of $1,449 per month. Sacramento, Riverside in California and Las Vegas reported the greatest year on year rent appreciation among the 35 largest US metros. In Sacramento and Riverside, median rents rose 7% and were up 4.5% in Las Vegas.

April ended with mortgage rates on Zillow at 4.35% after starting the month at 4.2%. April mortgage rates peaked toward the end of the month at 4.42%, the highest rate since the beginning of 2013, and hit a month low in the first few weeks of the month when rates were at 4.19%.