U.S. home values jumped in April, with the median at $215,600, an 8.7% increase from the same time frame last year.
According to online real estate company Zillow, this marks the fastest increase in home values since June 2006, when the housing market was beginning to slow down from the double-digit growth seen during the housing bubble. Zillow noted that, by September 2007, the median home value started the descent. This time around, home values have been moving higher since the early part of 2015, when the increase was under 5% year over year. Since the summer of 2015, the values started increasing and have been moving higher ever since, said Zillow.
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San Jose, California, led the charge in terms of rising home value growth in April. Zillow said that the median value in the city jumped 26.2% to $1.26 million. Coming in second place was Las Vegas, with the median home value jumping 16.5% to $260,800. Home values in Las Vegas still aren't at their pre-recession peak from 2006 of $316,800. Seattle was in third place, with a 13.6% rise in the value of homes in April to an average of $490,000.
Meanwhile, Baltimore saw the slowest growth in home values, with the median price increasing to $262,700, a mere 4.4% jump compared with April of last year. Washington, DC, was the second slowest growing market, with an increase of 4.5% to $398,900, while Houston saw home values increase 4.7% to $195,500.
The rising home values come at the same time that existing-home sales declined for April both on a monthly and year-over-year basis, according to a recent report by the National Association of Realtors (NAR). For April, the NAR found that total existing-home sales retreated 2.5% to a seasonally adjusted annual rate of 5.46 million, down from 5.60 million in March, the NAR reported. That's 1.4% below April 2017's sales rate and the second straight month of year-over-year declines.
Low inventory levels and climbing home prices are to blame for April's sales slump, says NAR Chief Economist Lawrence Yun. "The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home," he said. "Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford."