Rapid property price growth in the US continued to level off in the second half of 2014, but markets hardest hit by the recession are still seeing double digit value growth, the latest data shows.
Cumulatively, US homes will be worth $27.5 trillion at the end of 2014, a 6.7% increase overall, according to the latest data from real estate firm Zillow.
In November national home values continued to rise at an incrementally slower pace and are up 6% from last year, the third consecutive overall increase. Homes lost $6.1 trillion in value between December 2006 and December 2011.
The cumulative increase in home values is slightly smaller than the 8% recorded in 2013 and that kind of gradual slowing is a sign of the times as the market heads for slower expected gains in 2015.
Over the second half of 2014 inventory increased in many US markets and, with more homes on the market, home value appreciation slowed.
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‘Looking at the total value of the US housing stock proves just how huge and important the housing sector is to the overall economy,’ said Zillow chief economist Stan Humphries.
‘Virtually nowhere else will you see gains of more than a trillion dollars in one year represent only single digit percentages of the total market. As we conclude 2014 and look ahead at 2015 and beyond, housing will play a bigger role in the broader economic recovery,’ he explained.
‘As the job market improves and more households form, more people will search for homes to buy and rent, which will translate into more people buying appliances and home goods and lead to more jobs for home builders and contractors. Housing is well positioned to continue the great strides already made this year,’ he added.
Looking ahead, as more homes come on the market, growth in home values is expected to slow to 2.4% in the next 12 months, according to the Zillow Home Value Forecast.
There were 11.8% more homes for sale in November 2014 than a year prior, but inventory fell slightly in many major markets from October to November.
Among major markets, home values were up the most year on year in Miami with growth of 13.6%, up 12.8% in Atlanta, up 11.9% in Houston, up 11.9% in Orlando and up 11.5% in Las Vegas.
Values were higher than last November in almost every major US metro and national rents were up in November from a year ago by 3.4% to $1,342.
This article was republished with permission from Property Wire.