Zillow: Home Values Rise 7 Percent in 2016

The median home value in the U.S. rose to $193,800 in 2016, reported Zillow Inc., Seattle, a 6.8 percent jump from a year ago.

The company’s December Real Estate Market Reports also noted rents grew by 1.5 percent annually to a $1,403 median monthly payment.

“Home values ended 2016 growing at their fastest pace of the year, which could be an indication of what to expect in 2017,” said Zillow Chief Economist Svenja Gudell. “Lack of inventory will remain a major concern for home buyers this year. Especially lack of available entry-level homes coupled with high demand will continue to rapidly drive up home values in the near future.”

The report said home value appreciation slowed slightly in Portland, but remained fastest in the nation, up by 13.8 percent from last December. Tampa, Seattle and Dallas saw similarly high home value growth, with home values growing nearly 12 percent from a year ago.

Zillow said inventory remains a concern for home buyers across the country, noting 4.6 percent fewer available homes than a year ago. Among the nation’s largest markets, Boston and Minneapolis saw the biggest declines in inventory over the past year.

The report said rent appreciation stabilized at 1.5 percent annual growth, less than half the pace rents were growing at last year. The fastest rent appreciation occurred along the West Coast; Seattle led the nation in rising rents, with rents growing 8.4 percent in December, followed by Portland and Sacramento.

Gudell cautioned as the new year begins, flattening rents could take the heat off buyers who are struggling to find a home amid low inventory and give them more time to search for the right home. “Buyers should make sure they get pre-approved for a mortgage, and be prepared to move quickly, especially in hot markets like Seattle and Portland. It’s not uncommon for buyers to make at least two offers during their home search.”