Home values across the country are up 7% since last February, with 3% fewer homes to choose from than a year ago, and the median U.S. home value is $195,700, the highest value since June 2007, according to the February Zillow® Real Estate Market Reports released Thursday.
Tampa, Fla., Seattle, Dallas and Orlando, Fla. posted the highest year-over-year home value appreciation among the 35 largest metros across the country, all growing in the double-digits. In Tampa, home values rose almost 12% to a median home value of $182,100. Home values in both Seattle and Dallas are up 11% since last February. High buyer demand coupled with fewer homes for sale is driving home values higher in many of these markets — there are 5% fewer homes to choose from than a year ago in Tampa and 11% fewer in Orlando.
Across the country there are 3% fewer homes on the market than a year ago and many places with rapidly rising home values have inventory shortages in the double-digits. In Seattle, for example, home values are up 11% but the selection of homes down 10.5%. Millennials will have a big impact on this year’s home shopping season as they start aging into home ownership, especially in booming job markets that are attractive to young homebuyers.
“Low inventory, strong demand and tough competition will be the defining characteristics of this year’s home shopping season,” said Zillow Chief Economist Dr. Svenja Gudell. “Even though interest rates are rising, buyers are eager to start their home search. If you’re a prospective buyer about to enter the market, keep in mind that it’s rare to get the first home you make an offer on, and homes in particularly hot markets frequently sell for over asking price. Buyers should give themselves enough time to get their finances in order and find a real estate agent they know and trust before jumping into the market.”
National median rent across the nation is up 1.2% since last February, to a median payment of $1,406 per month. Seattle, Portland and Sacramento, Calif. reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle are up 7% to a Zillow Rent Indexii (ZRI) of $2,100. Rents in both Portland and Sacramento are up 5%.
Minneapolis, Cincinnati and Detroit reported the greatest drop in inventory since last February. In Minneapolis, there are 18% fewer homes on the market than a year ago and 15% fewer in Cincinnati.
In February, mortgage ratesi on Zillow ended at 3.89%, down from a high of 4.01% at the start of the month. The month low was 3.86%. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.
Purchase mortgage requests on Zillow are up 7% compared to this time last year, indicating that borrowers are moving forward with plans to buy a home amid rising interest rates. On the other hand, the refinance market is more rate-sensitive, and refinance requests on Zillow are down 69% compared to this time last year.
