July Home Prices Reach Highest Annual Increase Since 2006

Home prices rose 6% in July from year-ago levels, marking the highest annual gain achieved since 2006, according to the latest report from Zillow.

“After three straight months of annual home value appreciation above 5 percent, the U.S. housing market recovery has proven it is on very sound footing,” said Zillow Chief Economist Dr. Stan Humphries.

Monthly home values were up 0.4% from June, to a Zillow Home Value Index of $161,600. July also marks the 14th consecutive month of annual appreciation. 

Of the 393 metros surveyed in July, 289 (73.5%) registered month-over-month appreciation, and 303 (77.1%) showed annual appreciation. 

All 30 of the largest metro areas covered by Zillow registered both monthly and annual price increases in July. As all of these metros have hit their bottom, Zillow expects them to show price appreciation in the next 12 months. 

Sacramento, Las Vegas and San Francisco were cities with the largest annual gains in July at 33.1%, 30.8% and 27.8%, respectively.

“We have entered a new phase in the recovery when we can begin to turn away from ugly recent history and turn toward what the housing market of the future will look like and how it will act,” said Humphries.

For the 12-month period from July 2013 to July 2014, Zillow expects home values to rise another 4.8% to approximately $169,308, according to the Zillow Home Value Forecast. 

The number of completed foreclosures in July also fell to 4.9 homes foreclosed out of every 10,000 homes nationwide—down from 5.2 homes in June. 

Foreclosure resales represented 8.7% of homes sold in the U.S. in July, down 0.7 percentage points from June and 3.4 percentage points from July 2012. 

“It may be tempting to look at how the market is currently performing and think that tackling GSE reform and other large issues is no longer necessary,” said Humphries. “But while we can afford to turn away from the recent past, we cannot afford to forget it, and simply ignoring these problems only dooms us to repeat them.” he added.

Written by Jason Oliva

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