The Zillow Rent Index (ZRI) showed year-over-year gains for nearly 68% of metropolitan areas covered by the ZRI. By contrast, only 8% of metro areas covered by the index saw home values rise. In the short term, national monthly rents declined slightly from January to February, falling 0.5% to $1,212. Home values fell 0.5% during the same period, to $145,400.
According to Zillow, foreclosures continue to be a key driver in keeping home values down. Foreclosure resales made up 20.3% of all sales in February, slightly higher than their previous peak of 20.2% of all sales in March 2011. Foreclosure resales made up 19.1% of all sales in February 2011.
‘We have made it through the worst of the housing recession, with a bottom on the horizon, but the deep backlog of foreclosures, elevated negative equity and high unemployment are all still obstacles on the road to recovery,’ says Zillow Senior Economist Svenja Gudell. ‘The rental market remains a bright spot in the housing market, where many markets, especially hard-hit ones, are experiencing significant annual rent appreciation and drawing the attention of investors. Converting distressed and vacant properties into rental units will reduce the oversupply of homes and speed up the recovery process.’