Home values are rising nationally and fewer homes are on the market than there were a year ago, according to a new report by Zillow.
U.S. home values in February were up nearly 7% compared with the same month a year ago, according to the February Zillow Real Estate Market Report. The median U.S. home value is $195,700, the highest it has been since June 2007, the report found.
Meanwhile, there are 3% fewer homes on the market than there were a year ago, resulting in inventory shortages for homebuyers, the report found.
“Low inventory, strong demand and tough competition will be the defining characteristics of this year’s home shopping season,” Zillow Chief Economist Svenja Gudell said in a news release. “Even though interest rates are rising, buyers are eager to start their home search. If you’re a prospective buyer about to enter the market, keep in mind that it’s rare to get the first home you make an offer on, and homes in particularly hot markets frequently sell for over asking price.”
Other findings of the February Zillow report include:
• National median rent across the U.S. rose 1.2% over the past year to a median payment of $1,406 per month.
• Minneapolis, Cincinnati and Detroit reported the greatest decline in homes for sale over the past year.
• Mortgage rates on Zillow ended February at 3.89%, down slightly from just above 4% at the start of the month.
• Seattle, Dallas, and Tampa and Orlando, Fla. reported the highest year-over-year home value appreciation among the 35 largest metros across the country, all growing in the double-digits.
• Millennials will have a big impact on this year’s home shopping season, especially in booming job markets attractive to young homebuyers.
• Purchase mortgage requests on Zillow are up 7% compared to the same time last year. However, refinance requests are down 69% compared to last year.
To read more about the report, click here.