Home values have risen every month for 4 years
Home values increased again in July, making 48 consecutive months of gains.
The Zillow Home Value Index shows that values increased by 5.1 per cent in the year to July 2016 but would need to increase by almost as much again to exceed their 2007 peak. The median home value last month was $187,300; in 2007 it was £196,600.
"The consistent rise in home values that we've been seeing for the past four years masks a number of region-specific trends that have taken place over the past few months," said Zillow Chief Economist Dr. Svenja Gudell. "In most areas, the market is being driven mainly by a strong labor market and tight supply, especially among entry level homes that first time buyers are after.”
Those rising markets are led by Portland, Dallas and Denver with increases of 15,11.9 and 11.3 per cent respectively.
Home values in San Francisco have been easing though. In January they were 12 per cent above the level of January 2016 but in July they are up 6.6 per cent.
Rents across the US have been rising for almost 4 years with average increases of 2 per cent in the past year to $1,408.
Builder sentiment for apartments, condos slips
Builders are less confident in the market for apartments and condos following years of growth according to new data from the National Association of Home Builders.
Its Multifamily Production Index slipped three points in the second quarter of 2016 to 50, the midway mark between improving and worsening conditions for the market.
“Despite the modest decline this quarter, multifamily developers are still reporting steady demand,” said Andrew Chaban, CEO of Princeton Properties in Lowell, Mass., and chairman of NAHB’s Multifamily Council. “While conditions certainly vary market by market, we are optimistic that the apartment market will remain strong for the year.”
No change for mortgage rates but Yellen could change that
Average rates for a 30-year fixed rate mortgage were unchanged in the week ending August 25 at 3.43 per cent.
Data from Freddie Mac shows that an average 15-year FRM was also unchanged from a week earlier at 2.74 per cent while a 5-year ARM was slightly higher at 2.75 per cent, up from 2.74 per cent.
Fed chair Janet Yellen is speaking at Jackson Hole Friday and is expected to give some indication on the pace of interest rate increases which is likely to impact on mortgage rates over the coming week.
“This marks the ninth consecutive week that mortgage rates have been below 3.5 percent. Markets are erring on the side of caution ahead of the second estimate for second-quarter GDP and Fed Chair Janet Yellen's speech on Friday,” commented Freddie Mac chief economist Sean Becketti.