Many cities across the country have seen home prices continue to climb basically every month over the last couple of years, and August was no exception to this trend.
According to the August Zillow Real Estate Market report, 85% of the 382 metropolitans covered in the report experienced annual home price increases.
Among the 30 largest metropolitan areas analyzed by Zillow, 20 saw annual home price appreciation of at least 10%. Some of the most notable cities with annual increases in August were Sacramento (up 34.1%), Las Vegas (30.6%), San Francisco (28.1%), San Jose (24%), San Diego (23.7%), Phoenix (20.9%), Minneapolis (16.3%) and Seattle (16%).
Overall, home values were up 6.6% annually in August, which is the largest gain since July 2006 when home prices rose 7.9% year-over-year. The Zillow national home value index through August is $162,100, up 0.4% from July.
“August marked the end of one of the hottest summer home shopping seasons in years, as home value appreciation rates continued their rocket ride upward—perhaps dangerously so in some metro areas,” said Stan Humphries, chief economist for Zillow.
“Double-digit appreciation rates do help to lift homeowners out of negative equity and to entice sellers into a low-inventory environment, but this rapid growth is not normal and cannot and should not be expected to last.”
For example, August marked the third consecutive month in which monthly home values rose more slowly than the previous month. Humphries added that this moderation in the monthly pace of home value appreciation will be “good for the market” in the long term.
Over the next 12 months, Zillow is forecasting that U.S. home values will rise another 5.2% to approximately $170,500. Similar to the monthly home price trends, the largest gains are projected to occur in West Coast markets.
Meanwhile, national rents also increased in August over the previous month, up 0.5%. The Zillow Rent Index now has a mark of $1,293. On a yearly basis, rents in August rose by 1.9%.