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U.S. home values ended 2012 up 5.9% over the end of 2011, Zillow ($59.41 0.95%) reported when covering national home value appreciation.
Zillow’s home value index also hit $157,400 in the fourth quarter, up 2.5% from the quarter before.
The nearly 6% annual appreciation rate was well above the typical appreciation in a healthy market and represents the largest annual gain since 2006.
“We expected 2012 to be a good year for housing, and it delivered in spades,” said Zillow Chief Economist Dr. Stan Humphries. “Strong demand paired with limited inventory in many markets helped fuel a robust and often rapid recovery in overall home values, good news for homeowners after years of poor performance.”
Based on previous reports, annual home value appreciation is roughly 3% on average, according to Zillow.
Cincinnati and Chicago were the only metros of the 30 largest covered by the report that did not show quarterly increases in the fourth quarter.
Phoenix hit 22.5% year-over-year appreciation. Seven of the top 30 metros registered annual home value increases of at least 10%.
Click on the table below to see Zillow's full home value index.
Looking into 2013, Zillow predicts home values will increase by 3.3% in 2013, much closer to historic norms.
“We expect this recovery to continue into 2013, but at a more sustainable pace,” said Zillow Chief Economist Dr. Stan Humphries.
“It’s important to be cautious moving forward, even as we celebrate the undeniably positive end to 2012, and be careful that consumers don't grow to expect such high appreciation as the norm. Buying a home should be a long-term decision, and these swings between a deep housing recession and higher-than-normal appreciation rates can give consumers whiplash and cause some to lose sight of that.”
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