Double-digit home-value growth is setting records in Denver, San Jose, Dallas and San Francisco this home-buying season. The housing market is much cooler in Florida, with home values in Tampa, Miami-Fort Lauderdale and Orlando growing at half the pace they were one year ago.
The May Zillow Real Estate Market Reports highlight the country’s diverging real estate markets. After years of riding the same big roller coaster through the housing bubble, bust and recovery, local housing markets took home buyers and sellers on different rides this spring.
Nationally, home value growth has cooled, slowing to a rate of three percent year-over-year. Rents are growing faster: the median national rent is up 4.5 percent over the past year.
The slowing, diverging market is a sign of recovery, said Zillow Chief Economist Stan Humphries. And it means real estate is local again.
“What we’re seeing is the passing of the baton — as mortgage rates begin to rise, and incomes and household formation rates increase — from a stimulus-driven housing market to one driven by fundamentals,” Humphries said.
First-time home buyers are returning to the market, and by the end of 2015, Humphries expects the millennial generation to displace Generation X as the largest group of home buyers.
Home values are expected to slow even further in the next year, to an annual rate of 2.2 percent.
For more information about Zillow’s monthly report, check out Zillow Research.
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