Not only have home prices been on the rise for nine straight quarters, but they are starting to creep closer to being more expensive than ever.
According to the latest Zillow Home Value Forecast, home values grew 5.7% year-over-year in the first quarter, with declines experienced in the recession almost gone or close to being erased in almost 20% of metro housing markets nationwide.
Home values nationwide grew .5% from the fourth quarter of 2013, and are expected to increase another 3.3% through the first quarter of 2015.
"The lows of the housing recession are becoming an increasingly distant memory as home values reach new highs and homes become more expensive than ever in many areas. This is a remarkable milestone coming only two and a half years after the end of the worst housing recession since the Great Depression, and is a testament to just how robust this housing recovery has been,” said Zillow Chief Economist Stan Humphries.
Across the U.S., home values are still 13.5% below their 2007 peak, after falling 22.6% during the recession before bottoming in 2011.
However, the market seems to be moving past this in some areas.
So far, 1,080 of the more than 8,700 cities and towns covered by Zillow, have home values already at or expected to reach pre-recession levels in the next year, including in many hard-hit areas.
Affordability, however, is still a concern.
“But there are a handful of markets where affordability is again a challenge, even with mortgage interest rates incredibly low. Mortgage interest rates won’t stay low forever. And rents have also been marching steadily higher for several years,” Humphries said.
“As a result, the housing affordability issues we’re already seeing in select markets could become a much more widespread concern a few years from now. As affordability worsens, more residents will be forced to search for affordable housing farther from urban job centers, and home values in some areas may have to come down,” he added.
For example, homes in a handful of metros – including San Francisco, Los Angeles, San Jose and San Diego – are already unaffordable, with the share of residents’ incomes currently devoted to monthly mortgage payments exceeding historic norms.