US housing recovery becoming more widespread, latest index suggests

US home values nationwide rose for the sixteenth straight month in a row in February as the real estate market recovery gathered pace, according to the latest index from Zillow.

Its Home Value Index rose to $158,100 and all 30 of the largest metro areas covered by the index registered both monthly and annual appreciation in advance of the traditional spring home shopping season.

Overall values increased by 0.1% compared with January and were up 5.8% up year on year, the second largest annual gain since August 2006, exceeded only by January's 6% year on year jump. The last time national home values were at this level was in June 2004.

For the 12 month period from February 2013 through February 2014, US home values are expected to rise 3.2% to approximately $163,100, according to the Zillow Home Value Forecast.

Zillow pointed out that this rate is well below the 5.6% annual rate of appreciation recorded in 2012, and is in line with Zillow's expectations that home value appreciation will slow to closer to historic norms of between 3% and 5% in coming years.

‘The housing market recovery has continued to gain momentum over the past several months and looks firmly entrenched as we enter the 2013 spring home shopping season,’ said Zillow chief economist Stan Humphries.

‘We expect that rising home values will continue to help cure many of the ills still facing the housing market, including high levels of negative equity. Rising home values will free many more home owners from negative equity, allowing some of them to list their homes for sale which, in turn, will ease supply constraints,’ he explained.

‘Burgeoning new construction will also help bring more supply into the marketplace. As more supply comes on line, home value appreciation rates will moderate and stabilise, marking the final transition from a recovering market to a healthy and sustainable market,’ he added.

Of the 30 largest metro areas covered by Zillow, markets where home values increased the most over February 2012 included Phoenix which was up 22.9%, San Francisco up 18.6%, Las Vegas up 18.1%, San Jose up 17.1% and Sacramento, California, up 15.3%.

Only 73 of the 352 total metro markets covered by Zillow experienced year on year home value declines in February.
National rents rose slightly in February compared with January, up 0.1% to a Zillow Rent Index of $1,282. Year on year, national rents were up 4.5% in February.

The number of completed home foreclosures in February fell to 5.25 homes foreclosed out of every 10,000 homes nationwide, down 0.8 homes from January and 2.5 homes from February 2012.

Foreclosure resales represented 13.71% of homes sold in February, up 1.2% from January but down 3.5% from February 2012.