Small Increase in Home Values Expected


Home values are forecasted to appreciate in the coming year, but this appreciation is expected to be lower compared to the historic appreciation. Currently, the home values are marking a slight decrease on a monthly basis. Both upward and downward fluctuations may be seen in the coming months, but the positive trend will remain.

The Zillow Home Value Forecast predicts an appreciation of the home values by 2.2% from April 2014 to April 2015. This is just below the historic appreciation rate. In 96 of the 302 local markets which are covered by the Forecast the appreciation will be higher than 3%.

The properties in Riverside, California, are expected to have the highest value appreciation equal to 12.6%. The market with the second highest projected home value appreciation rate is Las Vegas, Nevada. The house values there are expected to increase by 8.7%. Seattle, Washington, takes the third place. The appreciation in the values of homes in the metro area is projected to be 8%.

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There are three major factors behind the slower appreciation of the home values. The negative equity rate is still high at 18.8% even though it marked a considerable decrease between the first quarter of 2013 and the first quarter of 2014. Nearly 10 million homes in the US are underwater and this has a major negative impact especially on the low end of the housing market.

Housing affordability is decreasing in many local markets and especially in the large metro areas. Currently, the increase in salaries is much lower compared to the increase in house prices. Factors such as growing student debt have a negative impact on affordability as well.

The third major reason for the small projected appreciation of the home values is the lower rate of household formation. People prefer to start a family at an older age and this affects their home buying decisions and the demand in the housing market as a whole.

Dramatic changes which may affect the current home value appreciation forecast are unlikely.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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