Home values are 6.9% higher than a year ago, with the median U.S. home now worth $202,700, according to the September Zillow® Real Estate Market Report, out Thursday.
Seattle and San Jose reported double-digit home value appreciation over the past year. In Seattle, home values are 12.4% higher than at this time last year, and home values are just over 10% higher in San Jose. Following these two metros in home value growth are Las Vegas, Charlotte, N.C. and Orlando, Fla. This is the ninth month in a row that Seattle home values have been the fastest growing in the nation.
| Fastest Appreciating U.S. Housing Markets | |||
| Rank | Metro Area | Median Home Value | Year-over-Year Growth |
| 1 | Seattle | $455,800 | 12.4% |
| 2 | San Jose, Calif. | $1,052,500 | 10.3% |
| 3 | Las Vegas | $233,600 | 10.2% |
| 4 | Charlotte, N.C. | $178,700 | 9.0% |
| 5 | Orlando, Fla. | $209,600 | 8.9% |
Home shopping season has ended, but demand for homes remains high, while inventory remains at record-level lows. According to the 2017 Zillow Group Consumer Housing Trends Report, the typical buyer spends just over four months searching, and almost half of all buyers don't get the first home on which they make an offer. Housing markets on the West Coast are exceptionally tight, but the theme of tight inventory echoes across the country.
"In these West Coast markets, heightened demand is being met with limited supply of homes for sale, which naturally causes prices to rise," said Zillow Chief Economist Dr. Svenja Gudell. "That limited supply and high demand dynamic is a widespread phenomenon impacting high-growth metros like Seattle, as well as slower-moving markets, like Indianapolis. It might be easy to assume another bubble is emerging, with home values growing 10 or 12% per year, but don't worry. The market is reacting to basic economic laws, and is behaving exactly the way we would expect it to given good overall growth, limited supply of homes for sale and decent housing affordability thanks to low mortgage interest rates."
Rental prices on the West Coast are also rising rapidly. Riverside, Calif. and Seattle reported the greatest annual rent appreciation among the 35 largest U.S. metros. In Riverside, rent is 6% more expensive than at this time last year, and 5.5% more expensive in Seattle. The median rental price in the U.S. is $1,430 per month, up 2% over the past year.
| Fastest Appreciating U.S. Rental Markets | |||
| Rank | Metro Area | Median Rent | Year-over-Year Growth |
| 1 | Riverside, Calif. | $1,833 | 6.0% |
| 2 | Seattle | $2,189 | 5.5% |
| 3 | Minneapolis | $1,617 | 5.1% |
| 4 | Portland, Ore. | $1,863 | 4.7% |
| 5 | Los Angeles | $2,714 | 4.5% |
Tight inventory and strong demand are two factors driving up home values; across the U.S., there are 12% fewer homes to choose from than a year ago. Inventory has dropped most significantly in San Jose, Seattle and San Diego over the past year. In San Jose, there are 60% fewer homes on the market than at this time last year, and 35% fewer in Seattle and San Diego.
Mortgage rates on Zillow ended the month of September at 3.70%, the lowest month-ending rate since May 2017. Mortgage rates on Zillow hit a high of 3.72% in the last few days of the month with the month low at 3.56%. 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.
| Metropolitan Area | Zillow Home Value Index (ZHVI) | ZHVI Year-Over-Year Change | Zillow Rent Index (ZRI) | ZRI Year-Over-Year Change | Year-over-Year Inventory Change |
| United States | $202,700 | 6.9% | $1,430 | 2.1% | -12.3% |
| New York/Northern New Jersey | $426,300 | 7.8% | $2,388 | 0.2% | -18.0% |
| Los Angeles-Long Beach-Anaheim, CA | $613,200 | 5.7% | $2,714 | 4.5% | -26.5% |
| Chicago, IL | $213,600 | 6.4% | $1,650 | 0.9% | -10.6% |
| Dallas-Fort Worth, TX | $214,800 | 8.9% | $1,592 | 3.0% | 27.7% |
| Philadelphia, PA | $218,200 | 3.1% | $1,578 | 0.4% | -15.7% |
| Houston | $182,200 | 4.2% | $1,531 | -2.4% | 4.7% |
| Washington, DC | $385,300 | 3.1% | $2,131 | 0.6% | -13.7% |
| Miami-Fort Lauderdale, FL | $257,900 | 7.1% | $1,849 | -1.5% | -0.4% |
| Atlanta, GA | $182,700 | 7.9% | $1,374 | 4.3% | -13.3% |
| Boston, MA | $430,700 | 7.0% | $2,362 | 2.3% | -19.7% |
| San Francisco, CA | $865,400 | 6.0% | $3,376 | -0.4% | -32.9% |
| Detroit, MI | $142,400 | 8.5% | $1,174 | 0.7% | -20.0% |
| Riverside, CA | $333,000 | 6.0% | $1,833 | 6.0% | -21.1% |
| Phoenix, AZ | $240,500 | 6.5% | $1,339 | 3.5% | -12.9% |
| Seattle, WA | $455,800 | 12.4% | $2,189 | 5.5% | -35.2% |
| Minneapolis-St Paul, MN | $247,200 | 6.6% | $1,617 | 5.1% | -23.7% |
| San Diego, CA | $553,900 | 6.5% | $2,528 | 4.3% | -34.7% |
| St. Louis, MO | $148,300 | 1.4% | $1,139 | 1.6% | -10.6% |
| Tampa, FL | $188,300 | 8.8% | $1,363 | 2.4% | -22.4% |
| Baltimore, MD | $262,000 | 3.8% | $1,729 | 0.2% | -21.1% |
| Denver, CO | $372,800 | 7.2% | $2,034 | 1.5% | -22.1% |
| Pittsburgh | $137,800 | 4.6% | $1,075 | -1.0% | -10.3% |
| Portland, OR | $369,700 | 7.2% | $1,863 | 4.7% | 0.4% |
| Charlotte, NC | $178,700 | 9.0% | $1,282 | 3.8% | -12.3% |
| Sacramento, CA | $373,600 | 8.1% | n/a | n/a | -24.7% |
| San Antonio | $166,100 | 7.3% | $1,334 | 1.1% | -4.0% |
| Orlando, FL | $209,600 | 8.9% | $1,422 | 3.5% | -16.8% |
| Cincinnati, OH | $154,100 | 5.8% | $1,272 | 2.9% | -19.0% |
| Cleveland, OH | $136,300 | 6.7% | $1,139 | -0.5% | -12.9% |
| Kansas City, MO | $161,100 | 6.7% | $1,267 | 2.8% | 3.6% |
| Las Vegas, NV | $233,600 | 10.2% | n/a | n/a | -26.2% |
| Columbus, OH | $166,400 | 6.0% | $1,320 | 2.5% | -26.6% |
| Indianapolis, IN | $138,700 | 4.3% | $1,202 | 0.9% | -21.1% |
| San Jose, CA | $1,052,500 | 10.3% | $3,486 | -0.3% | -60.1% |
| Austin | $274,700 | 6.5% | $1,694 | -0.7% | 4.4% |
