The data follows increasing sales of US real estate in 2013. Total existing-home transactions edged up by 0.8 per cent in the first three months of the year to reach 4.94 million – a rise of 9.8 per cent compared to the same period last year.
Indeed, sales of US property are now at the highest level since the fourth quarter of 2009.
Photo credit: Cyndie
With sales climbing and inventory shrinking, the low supply and high demand have steadily pushed house prices in America up. The median single-family house price was up in almost all metro areas in the first quarter of 2013 compared to 2012, with prices now 11.3 per cent higher year-on-year.
The supply/demand balance has driven the market recovery forward in the last 12 months, turning the US into a sellers’ market. With growing confidence from US home builders to boot, American real estate is beginning to build genuine momentum.
But while values are rising, historic low mortgage rates have helped to keep property affordable for investors. Indeed, this record affordability is partly what makes buying a smarter financial option than renting.
“Locally high home value appreciation in many areas, combined with historically low mortgage rates and low home prices relative to recent peaks, has made buying a home a more advantageous financial decision than renting for many would-be buyers,” said Zillow Chief Economist Dr. Stan Humphries.
Among the 30 largest metro areas analysed by Zillow in the first quarter, it would take buyers 5.2 years to start saving money from buying as opposed to renting in New York. Boston property would take 4.1 years to break even, compared to San Jose’s 3.7 years.
But Phoenix, Detroit and Miami led the way, with buyers only having to own property for two years before saving money on the rental costs. Indeed, the areas with the strongest capital appreciation will help owners to recoup rental costs at a far quicker rate: the rapid recovery of Florida’s real estate, particularly in Miami and Tampa, will only boosts the state’s popularity even further.
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