According to Zillow's latest Real Estate Market Report, increased competition among American homebuyers, coupled with a continued short supply of home inventory, is causing home values to skyrocket at a record pace. Specifically, the experts at Zillow report that home values have risen an impressive 1% since September (now up to an average of $262, 604).
This uptick represents the greatest monthly increase since 2005, leaving it as a record-breaking rise for the last 15 years. Also reported to have reached record-breaking levels since 2005 is the number of homes that have changed hands, with more residential properties being bought and sold than any other month within the past more than a decade-long time window. Specifically, the reported October's seasonally adjusted annualized rate of home sales was 6.85 million (information gathered from the National Association of Realtors).
In light of this data, after careful analysis, Zillow expert economists predict that this rate will stay at this height throughout 2021. They even predict that this coming year will be the strongest one seen since 2006. Zillow’s pros specifically are forecasting an average of 6.42 million through September 2021.
Zillow senior economist Jeff Tucker commented—and further explained in detail—this recent rise: "The red-hot housing market of this summer and fall is now clearly reflected in soaring home value appreciation. We haven't seen such steep, short-term appreciation since the summer of 2005, but this time it is driven by buyers with strong credit and incomes securing affordable fixed-rate mortgages, unlike the wave of poorly vetted, exotic mortgages that financed the last boom. The simple fact is that millions of well-qualified Millennials are seriously shopping for houses and they are competing for a shortfall of homes for sale.”
Also worthy of note in the report is that while the for-sale market has only gained in strength, the rental market has reacted the opposite: continuing to weaken. According to Zillow data, annual rent growth registered at a mere 0.9%, with much of the reasoning being the fact that the more expensive coastal city locales across the nation are continuing to produce disappointingly lower numbers.