Home Value Growth Breaks Records as Rents Stabilize, Zillow Reports
Rent appreciation began to recover in November after a long slide that began in February, and home value growth soared to new heights, according to online real estate company Zillow’s latest Real Estate Market Report.
Looking forward, Zillow economists predict 2021 sales to be the strongest since 2005, for rent growth to make up for what it lost in 2020 and for home values to reach 10% year over year growth by November.
The typical U.S. rent was up 1.1% year over year in November to $1,734, after sliding from 3.9% growth in February to just 0.7% growth in October.
Among the 100 largest U.S. markets, monthly rent growth was highest in Stamford, Connecticut (3.1%), Providence, Rhode Island (2.3%), and Ogden, Utah (2.1%).
Typical rents in November are in roughly the same place they began the year, rising only $4 since January as renters were particularly hard-hit by the coronavirus pandemic and resulting recession.
Just recently, Gen Z renters especially began venturing back out on their own and often finding good deals, but a predicted rebound in the rental market may make those a limited-time offer.
While the rental market appears poised to turn the corner, the for-sale market continues to have the pedal pressed firmly to the floor. Zillow’s 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 going back to 1996.
Home values across the U.S. rose 7.5% since last year to $263,351. The largest annual increases by metro are in San Jose at 14.2%, Phoenix at 14.1% and Seattle at 13.2%.
The rapid acceleration in home values across the U.S. is driven by robust demand and diminishing inventory — the same forces that established this sellers’ market after a short spring lull.
Looking forward to next year, Zillow economists expect home values to increase by 3.6% in the three months ending February 2021 and by 10.3% from November 2020 to November 2021.
Find out more at www.zillow.com.
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