National home value appreciation rose again in July, up 0.4 percent from June to a Zillow Home Value Index of $161,600, according to the July Zillow Real Estate Market Reports. Home values were up 6 percent year-over-year in July, the 14th straight month of annual appreciation and the first time year-over-year appreciation rates have reached 6 percent since 2006.
Monthly home values have risen in 20 of the past 21 months, beginning in November 2011 after the U.S. market bottomed in October of that year. The 6 percent national rate of annual appreciation is the highest since August 2006.
Of the 393 metros covered in July, 289 (73.5 percent) registered month-over-month appreciation, and 303 (77.1 percent) showed annual appreciation. All 30 of the largest metro areas covered by Zillow registered both monthly and annual appreciation in July, and all have hit their bottom and are expected to show appreciation in the next 12 months. Metros with the largest annual gains in July included Sacramento (33.1 percent), Las Vegas (30.8 percent) and San Francisco (27.8 percent).
For the 12-month period from July 2013 to July 2014, U.S. home values are expected to rise another 4.8 percent to approximately $169,308, according to the Zillow Home Value Forecast[iii]. Large metro areas expected to show the most appreciation over the next year include Sacramento (19.6 percent), Riverside (19.2 percent) and San Francisco (13.2 percent).
“After three straight months of annual home value appreciation above 5 percent, the U.S. housing market recovery has proven it is on very sound footing. We have entered a new phase in the recovery when we can begin to turn away from ugly recent history and turn toward what the housing market of the future will look like and how it will act. The time to have these discussions is now, and recent efforts by President Obama and both parties in the House and Senate to begin addressing still-lingering structural issues related to housing finance are very encouraging,” said Zillow Chief Economist Dr. Stan Humphries. “It may be tempting to look at how the market is currently performing and think that tackling GSE reform and other large issues is no longer necessary. But while we can afford to turn away from the recent past, we cannot afford to forget it, and simply ignoring these problems only dooms us to repeat them. How we handle these all-important policy debates will be critical in keeping the housing market on sound footing for years to come.”
National rents also rose in July compared with June, up 0.5 percent to a Zillow Rent Index[iv] of $1,287. Year-over-year, national rents were up 1.7 percent in July.
The number of completed foreclosures in July fell to 4.9 homes foreclosed out of every 10,000 homes nationwide, down from 5.2 homes in June. Foreclosure resales represented 8.7 percent of homes sold in the U.S. in July, down 0.7 percentage points from June and 3.4 percentage points from July 2012.