According to Zillow’s® latest Real Estate Market Report, November experienced recovery in rent appreciation, following a long decline that started in February. Additionally, home value growth continues to reach record highs.
The report found that the typical U.S. rent increased 1.1 percent year-over-year in November to $1,734—a significant show of recovery after sliding from 3.9 percent growth in February to 0.7 percent growth in October. The following areas among the 100 largest U.S. markets have the highest monthly rent growth currently: Stamford, Conn., (3.1 percent), Providence, R.I. (2.3 percent) and Ogden, Utah (2.1 percent).
“With a vaccine on the horizon and Gen Z continuing to graduate from college, we expect the cloud of uncertainty surrounding the pandemic to lift and demand for rental units to surge in 2021,” said Zillow senior economist Chris Glynn. “Though the coming rebound in the rental market is good news for some, it will certainly put millions of renters who were hit hard by pandemic-related income loss in an even more tenuous position, and further government intervention will likely be needed to avoid a painful wave of evictions.”
As for home values, across the U.S., they increased 7.5 percent since last year to $263,351. By metro area, the largest annual increases occurred in San Jose (14.2 percent), Phoenix (14.1 percent) and Seattle (13.2 percent). Zillow economists predict that home values will increase by 3.6 percent in the three months ending February 2021 and by 10.3 percent from November 2020 to November 2021.
“We expect the housing market to continue its bull run from this summer and fall well into 2021,” said Zillow senior economist Jeff Tucker. “This rapid price growth will be driven by the same factors that took the steering wheel in 2020: strong demographic trends, shifts in buyer preferences sparked by the pandemic, low mortgage rates and short supply. The millennial generation is moving into their mid-30s and bringing a wave of demand from renters looking to buy their first homes.”