All across the country, home values have risen a staggering 8.7% since April 2017. This puts homes at a median value to $215,600, according to Zillow and confirmed by the Federal Housing Finance Agency. Home values increased in all 50 states as well as the District of Columbia (DC) within the first four months of 2018. According to that report, “Home values have not appreciated this quickly since June 2006, right before the housing bubble burst, when they were appreciating 9 percent annually. U.S. home values are now higher than they have ever been, and home values in 21 of the 35 largest housing markets have surpassed the peak value hit during the height of the housing boom over a decade ago.”
Rise in Home Values
Annual appreciation was over 10 percent in Nevada (13.7 percent), Washington (13.1 percent), Idaho (11.1 percent), Colorado (10.6 percent). Zillow hasn’t noted appreciation this fast since June 2006 when home values rose 9% annually.
“Home values are rising faster than we’ve seen in a very long time: The spring home shopping season has been a perfect storm of strong demand and tight supply,” said Zillow senior economist Aaron Terrazas. “Sluggish new construction has exacerbated the supply situation and homes that are hitting the market, are moving very quickly once they do. Americans are also in a spending mood, boosted by recent tax cuts and rising wages. Millennials who long delayed becoming homeowners, are out in force – a shift we’re also seeing in softer rent appreciation.”
The rise in home values allows more people to take cash out of their homes when they refinance – and more people are doing just that. In fact, the number of people taking cash out of their homes rose to 61% in the first quarter of 2018, which is the highest rate in over a decade.
Rapid home appreciation is happening all over the country. San Jose home values have appreciated 26% over this time last year. Las Vegas, Seattle, Dallas-Fort Worth, San Francisco, Tampa, Atlanta, Charlotte and Orlando all also saw large growth.
In the Miami-Fort Lauderdale, Florida area, the median home value rose 7.5% to $269,100, while the average rental price rose 1.2% to $1,867.
In Tampa, Florida, the median home value rose 12.4% to $202,900, while the average rental price rose 2.4% to $1,383.
Finally, the Orlando, Florida median home value rose 10.1% to $223,700, while the average rental price rose 3.5% to $1,448.
What This Means for Mortgages
According to the Zillow, “April ended with mortgage rates […] 4.35 percent, after starting the month at 4.20 percent. April mortgage rates peaked toward the end of the month at 4.42 percent, the highest rate since the beginning of 2013, and hit a month low in the first few weeks of the month when rates were at 4.19 percent.
Related: Current Interest Rates
Mortgage interest rates change every day. Plus, the interest rate for which you qualify depends on a variety of factors. So, the best way to learn about the interest rate you may qualify for is to speak with a lender and get preapproved for a mortgage.
What This Means for Buyers
More people are renting rather than buying, but Zillow also found that the median rental rate rose as well.
According to the Zillow report, “Median rent across the nation rose 2.5 percent over the past year to a median payment of $1,449 per month. Sacramento, Calif., Riverside, Calif., and Las Vegas reported the greatest year-over-year rent appreciation among the 35 largest U.S. metros.”
At some point, therefore, the trend will probably reverse as more renters decide there is value in owning a home. So, as home values continue to increase, watch for the trend to reverse in upcoming months.
Related: Apply for Mortgage Pre-Approval
Marimark Mortgage’s home office is in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.