Compared to September, home prices increased by 1.1% across the country reaching a value index of $155,400. This is the largest monthly increase since August 2005, the Seattle-based firm said.
Annually, home values were up 4.7% from October 2011, which is the largest gain in nearly six years.
Meanwhile, rents remained basically flat month-over-month, falling a meager 0.1% to an index value of $1,279. However, over the last year, rents are up 5.4%.
Of the 30 largest metro areas covered by Zillow, only Chicago experienced monthly home value declines. Major markets where home values increased the most since last year include Phoenix (up 22.3%), San Jose (11.4%), Denver (10.4%) San Francisco (9.5%) and Miami-Ft. Lauderdale (8.8%).
“Those dubious about the durability of the housing recovery will point to the large role that investors are playing, or to the large number of foreclosures yet to hit the market, as factors to be wary of,” said Stan Humphries, chief economist for Zillow. “But the bottom line is that homes are more affordable now than at any time in recent memory, and buyers are seizing this opportunity. We expect to see increasing numbers of potential buyers entering the market as the broader economy continues to recover and household formation picks up further.”