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Americans aspiring to new homeownership or to step up to the middle market face a difficult road. While overall home values in the US are rising at a modest rate, limited supply among entry-level and mid-market homes—traditionally the foundation of the housing market—is driving up prices in those sectors much more precipitously.
Here are the five takeaways from Zillow's recent report on the Q1 2016 housing market:
Overall, there are 5.9% fewer homes for sale in the US than there were a year ago.
The numbers get worse the lower in the housing market you go (see graph): entry-level homes for sale declined 10.4%.
Of the country's 35 largest housing markets, just six saw the values of top-tier homes grow faster than those of lower-tiered ones.
Meanwhile, some markets saw rifts emerge between top- and bottom-tier home value growth. Bottom-tier homes in Denver, for example, appreciated at an annual rate of 20.3% in March, while the value of the city's top-tier houses increased by 10.6%.
Looking ahead, Zillow expects national home values to continue rising—another 2.7% to March 2017, to a Zillow Home Value Index of $191,257.
To read the full report, click here.
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