House values rose 6 percent in 2012 for first gain in 6 years
Homes values gained an estimated 6 percent in the United States this year, the first increase since 2006, as the housing market began to recover from its worst slump since the 1930s, Zillow said Thursday.
Values have climbed more than $1.3 trillion to $23.7 trillion since the end of last year and probably will continue to rise in 2013, the Seattle-based home-listing service said in a statement. Residential values had declined each year since 2007, with the biggest drop in 2008, when homes lost more than $3.2 trillion in value, said the real estate database.
Low interest rates, improving employment and prices that remain almost 30 percent below their July 2006 peak have drawn buyers back into the market. A limited inventory of homes for sale has helped push up prices.
"The housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil," Stan Humphries, Zillow's chief economist, said in the statement. "As home values rise, and more homeowners are freed from negative equity, we can expect a continued slow transition to a more normal housing environment."
Sales of existing homes increased in November to an annual pace of 4.9 million, up 2.3 percent from October and 11 percent from a year earlier, according to the average of 82 estimates in a Bloomberg survey. Permits to build new homes, a proxy for future construction, rose to a four-year high last month, the Commerce Department reported Wednesday.
Nationwide, home values remain down about $5.8 trillion from their peak of $29.5 trillion in the third quarter of 2006, according to Zillow.