Zillow’s housing market report for October shows that home values in the United States have now increased by 6% or more for the 15th month in a row.
This figure is double the long-term “normal” yearly rate of price growth, said Zillow Chief Economist Svenja Gudell.
With surging demand and housing stock levels remaining low, the median home price increased by $12,500 over the last year. In more than half of the nation’s biggest metropolitan areas, homes are now valued higher than they were prior to the recession of the previous decade.
Gudell said: "We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country.”
She added that home prices were escalating at a historically rapid rate and that those who would like to buy a home should do so while it’s still possible.
She added: "But with homes gaining so much value in just one year, buyers – especially first-time buyers – have to set aside more and more money for a down payment just to keep up with them."
Several markets on the West Coast have experienced what can only be described as massive price gains. In San Jose, the median home price increased by no less than 12.3% over the last year. According to Zillow, this means the median price of a home in this city went up by $118,200 to $1.08 million last month.
In Seattle, the city with the second-highest home price increases, the annual rise was 11.7% and the median now stands at $457,700.
While the wealthy might be shocked by these high increases, it is ultimately the less affluent who are carrying the brunt of the price explosion. Lower-valued homes across the country are recording the sharpest price increases, says Zillow, surging by 8.4% since last October.
The median price for residential properties in the bottom 33% of all homes across the nation now stands at $118,200. Meanwhile, the typical home price in the top 33% of all homes increased only by 3.8% and now stands at $358,900.
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