Inventory shortage to drive home value increase in 2018
Home values grew during 2017 at their fastest pace in four years and the same supply and demand dynamics behind that increase remain in place for 2018.
The total value of all homes in the United States is now $31.8 trillion, a 6.5% increase when compared with December 2016, according to data compiled by Zillow. During the early stages of the housing recovery in 2013, the cumulative value of all U.S. properties rose 8%.
"Strong demand from buyers and the ongoing inventory shortage keep pushing values higher, especially in some of the nation's booming coastal markets," Zillow senior economist Aaron Terrazas said in a press release.
"Despite recent changes to federal tax laws that have historically made homeownership financially attractive, the long-term dynamics pushing up home values and rents are unlikely to change significantly in 2018."
The housing market has gained $9 trillion in value since the lowest levels of the recession.
Among the nation's 35 largest markets, Columbus, Ohio, had the largest year-over-year percentage growth at 15.1%. Next was San Jose, Calif., at 13.5%, followed by Dallas-Fort Worth at 12.3%, Seattle at 11.7% and Tampa, Fla., at 11.3%.
Homes in the Los Angeles-Long Beach-Anaheim metro area had a cumulative net worth of $2.7 trillion, 5.7% increase over December 2016, while properties in the New York-Northern New Jersey market had a $2.6 trillion value, up 7.9% on a year-over-year basis.
Meanwhile, rent growth slowed during the past year. "Renters spent more than ever on rent this year, but the amount they spent grew at the slowest pace in recent years as more renters transitioned into homeownership and new rental supply slowed rent growth across the country," Terrazas said.