U.S. Home Values Seen Gaining Most Since ’05, Zillow SaysPrashant Gopal
U.S. homes gained $1.9 trillion in total value this year, the biggest jump since 2005, as the real estate market rebounded from the recession, Zillow Inc. said.
At the end of 2013, the housing stock will be worth about $25.7 trillion, Zillow said today in a statement. U.S. homes as a whole lost $6.3 trillion in value from 2007 through 2011 and have recovered 44 percent of that, according to the Seattle-based property-data firm.
Home prices are rising across the U.S. as investors drain markets of inventory and improving employment brings in more buyers. Almost 90 percent of the 485 metropolitan areas analyzed by Zillow had price gains this year. The total value of the nation’s housing stock jumped about 7.9 percent from 2012, the second straight annual increase, according to the report.
“The housing market continued to build on the positive momentum that began in 2012,” Stan Humphries, Zillow’s chief economist, said in the statement. “Low mortgage rates and an improving economy helped bring buyers into the market.”
Price increases will slow next year to a pace closer to the historic norm of 3 percent to 5 percent, according to Humphries.
The Federal Reserve yesterday said it will scale back asset purchases that have bolstered housing demand by keeping interest rates low. Improvements in the job market spurred the decision to cut spending on Treasuries and mortgage bonds to $75 billion from $85 billion starting in January, the Federal Open Market Committee said at the end of a two-day meeting in Washington.
“The housing market is transitioning away from the robust bounce off the bottom we’ve been seeing, toward a more sustainable, healthier market,” Humphries said.