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Home Values Continue to Improve, Inventories Shrinking
|While a smaller inventory of homes listed for sale may sound like potential buyers have less to choose from, a lower number of delinquent properties continues to allow home values to increase.
Friday, August 31th, 2012
While a smaller inventory of homes listed for sale may sound like potential buyers have less to choose from, a lower number of delinquent properties continues to allow home values to increase.
Zillow's Home Value Index report for the month of July shows home values were up 0.5 percent from the previous month, reaching a mark of $151,600. While the increase is small, values were up 1.2 percent from this time last year.
Despite high affordability offered to prospective buyers, many Americans continue to lease homes, but rising rents may prompt more tenants to make the big investment of purchasing a property. Data from the report shows rents rose 0.2 percent on a month-over-month basis and were up 5.4 percent from a year ago. They have increased on a national level for the last six consecutive months and are expected to remain higher than many mortgage payments.
"This summer, the housing market continued to heal, as home values experienced their eighth consecutive month of increases," said Stan Humphries, chief economist of Zillow. "Tight inventory levels are leading to bidding wars and multiple offers across the country. Looking ahead, we expect to see less aggressive increases in the fall as rising values lift some would-be sellers out of negative equity, allowing them to place their homes on the market."
One main reason home values have been increasing in recent months is the significantly lower inventory of foreclosures and short sales listed for sale on the market. Zillow reports that foreclosures were down in July, as 5.7 of every 10,000 homes in the country went into foreclosure.
Most metropolitan areas covered in the report saw higher home values in July, while only 49 of the 167 areas posted declines. Phoenix had the highest monthly increase, as home values were up 2.2 percent from June. In Florida, home prices were up 3.8 percent in the Miami-Fort Lauderdale area from July last year. The average home value in July was $145,600.
Local housing markets in Florida continue to improve as home sales remain steady and more potential buyers are purchasing properties in the higher-end segment, which also helps boost home values.