U.S. home values increased 5% nationally to $188,100, but in some metros home-price appreciations was much higher, according to the August Zillow Real Estate Market Reports.
On the other hand, household income posted its first significant increase, 5.2%, in eight years, new data from the U.S. Census Bureau showed.
Inventory is also causing restraints in the housing market and pushing home prices up. Privately-owned housing starts in August decreased to a seasonally adjusted annual rate of 1,142,000, according to a report released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This is 5.8% below the revised July estimate of 1,212,000, but is 0.9% above the August 2015 rate of 1,132,000.
“The housing market is starting to smooth out ever-so-slightly, as the peak home shopping season winds down,” Zillow Chief Economist Svenja Gudell said. “This is good news for frenzied buyers tired of tight inventory, rapidly rising home prices and intense competition.”
Surprisingly, San Francisco and San Jose are no longer in the fastest-appreciating housing markets as median home values in these markets slowed to just a 6% annual increase.
“Inventory, while still down nationwide and in most areas, is actually starting to rise in a handful of markets, including the Bay Area, Texas and parts of the Southwest,” Gudell said. “Rent growth has slowed considerably from just a few years ago, giving renters a chance to save enough to buy a home.”
“But make no mistake, it’s still tough out there for buyers, especially in Western markets like Seattle, Denver and Portland that have strong job growth,” she added. “Things won’t switch from a sellers’ market to a buyers’ market overnight, but conditions are starting to improve.”
Here are Zillow’s top five metros with the fastest appreciating home values:
5. Tampa, Florida, home prices increased 9.8% to $170,500
- Rent prices increased 3.3% to $1,332
- Housing inventory decreased 10.1%
4. Denver, Colorado, home prices increased 10.7% to $341,400
- Rent prices increased 4.1% to $2,013
- Housing inventory increased 7.4%
3. Seattle, home prices increased 11.3% to $397,800
- Rent prices increased 9.7% to $2,067
- Housing inventory decreased 6%
2. Dallas-Fort Worth, Texas, home prices increased 12% to $193,900
- Rent prices increased 3.6% to $1,543
- Housing inventory decreased 20.6%
1. Portland, Oregon, home prices increased 14.8% to $338,900
- Rent prices increased 7.4% to $1,777
- Housing inventory decreased 12.4%