Going forward, Zillow’s forecast model expects US home prices, as measured by the Zillow Home Value Index (ZHVI), to jump 4.8% between April 2023 and April 2024. For perspective, national prices in the house tracked by ZHVI averaged an annual appreciation rate. by 5.08% since 2001.
“A normal spring seller [spring] The weather represents a dramatic change from the second half of 2022, which was cooler than normal as buyers retreated in the face of affordability challenges. The challenges are still dire,” wrote Jeff Tucker, an economist at Zillow a report published earlier this month. “Despite being 2.2% lower than the peak in July… [U.S. home prices are] still 1.5% higher than a year ago and 38% higher than in April 2020, an 11% average annual growth rate in the last 3 years.
Among the nation’s 400 largest housing markets (see map above), Zillow expects only 10 markets, including Houma, La. (-5%) and Santa Rosa, Calif. (-0.1%), which will see a decrease in house prices between April 2023 and April 2024.
Over the same 12-month period, Zillow expects 390 regional housing markets to see home price increases. Of that, Zillow thinks 150 markets will rise by less than 4%, another 203 by 4% to 6.99%, and 37 by at least 7.00% (see chart below).
Why is Zillow so strong in these 37 housing markets?
There is no one thing that unites—and these 37 housing markets are located all over the country. They spread to the West (such as Show Low, Ariz.), the South (such as Sevierville, Tenn.), the Midwest (such as Columbia, Mo.), and the Northeast (such as Augusta, Maine).
The reason Zillow economists think home values may continue to rise, however affordability remains under pressurebased on the fact that supply remains tight and demographics remain favorable.
“All told, about half a million fewer new listings entered the market in the first four months of 2023 than in the first four months of 2019—a deficit of 30%. , where they paid about 3% in mortgage interest in many cases, when they have to pay 6% or more on a new 30-year loan,” Zillow’s Tucker wrote. in a recent report.
While companies want CoreLogic and Zillow expects national home prices to rise in the coming year, as do companies Fannie Mae and Moody’s Analytics still expecting a mild correction this year.
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