US housing recovery under way but negative equity is holding the market back
31-05-2012
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Home values rose significantly in the Miami-Fort Lauderdale and Phoenix metro areas, rising 1.6 and 1.9%, respectively. However, values continued to fall in hard hit markets such as Atlanta, where home values declined 0.7%.
On an annual basis prices have fallen the most in Chicago where they are down 8.7%, Atlanta down 7.8% and Sacramento in California down 5.1%. Prices increased most on an annual basis in Phoenix where they are up 5.7%, in Miami-Fort Lauderdale up 2.9% and in Denver up 2%.
Rents also rose from March to April, increasing 1.6%. They are up in 78% of the 178 markets covered by Zillow. Rents have increased most in Philadelphia, up 14.9% year on year, followed by Baltimore with a 10.2% rise and Minneapolis up 8.4%.
‘The housing market continues to show positive signs, with home values increasing significantly in April. The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market,’ said Zillow chief economist Stan Humphries.
‘With almost one third of home owners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We'll continue to watch this signal as increasing home values turn from a blip into a trend,’ he added.
Foreclosures continued to decline in April, with 6.8 out of every 10,000 homes in the country being foreclosed. That was down from eight out of every 10,000 in March.
