SEATTLE, Feb. 16, 2018 /PRNewswire/ -- Owners of starter
homes across the country are gaining equity faster than other
homeowners because demand for entry-level homes continues to grow
faster than supply.
The phenomenon – which has become more pronounced over the past
few years -- underscores the power of homeownership to build
wealth, particularly among the middle class.
For this analysis, Zillow® divided the U.S. housing stock into
equal thirds based on value and determined the median value of the
most and least valuable homes. Over the past year, homes in the
most affordable segment of the market, which are often sought after
by first-time buyers, gained 8.5 percent in value, compared to a
3.6 percent gain for the most expensive homes. Over the past five
years, the difference is even more noticeable -- people who own
starter homes have seen their equity grow by 44.4 percent, while
owners of top-tier homes have gained 26.6 percent.
A home is the biggest financial asset and a significant share of
net worth for many homeowners. Less affluent homeowners typically
have more of their wealth in their homes than homeowners with a
higher net worthi. Owners of more affordable homes are
seeing their homes' value, and therefore their overall wealth, grow
rapidly.
"When the housing market crashed, owners of the least valuable
homes were especially hard hit, and lost more home value than
homeowners at the upper end of the market," said Zillow senior
economist Aaron Terrazas. "Since
then, though, demand for less expensive, entry-level homes has
built steadily, causing prices to grow rapidly. As a result, these
homeowners have been able to build wealth at a faster pace than
owners of more expensive homes."
Strong home value appreciation among more affordable homes is
beneficial for people who own those homes, but also makes it
difficult for buyers trying to enter the market. Inventory among
the most affordable homes is extremely limited, making for a highly
competitive market going into home shopping season -- there are
nearly 18 percent fewer entry-level homes available now than a year
ago.
Among the largest U.S. housing markets, owners of the cheapest
homes in Tampa, Florida are seeing
the greatest gains in home equity. Over the past year, these homes
have gained 20.4 percent in value. Las
Vegas homeowners are close behind. The most affordable homes
there have appreciated 19.9 percent from last year.
San Francisco, Seattle and San
Jose, California are the only large markets where the most
expensive homes are gaining value faster than starter homes.
Metropolitan
Area
|
Bottom
Tier ZHVI
|
1-Year
Change -
Bottom
Tier
|
5-Year
Change -
Bottom
Tier
|
Top Tier
ZHVI
|
1-Year
Change -
Top Tier
|
5-Year
Change -
Top Tier
|
United
States
|
$120,100
|
8.5%
|
44.4%
|
$363,000
|
3.6%
|
26.6%
|
New York,
NY
|
$260,200
|
8.5%
|
24.1%
|
$790,600
|
5.7%
|
29.2%
|
Los Angeles-Long
Beach-Anaheim, CA
|
$436,700
|
9.0%
|
66.2%
|
$1,062,000
|
7.8%
|
44.7%
|
Chicago,
IL
|
$122,100
|
5.0%
|
31.6%
|
$373,400
|
1.3%
|
19.6%
|
Dallas-Fort Worth,
TX
|
$132,100
|
10.5%
|
78.8%
|
$391,100
|
5.4%
|
46.5%
|
Philadelphia,
PA
|
$117,800
|
5.2%
|
16.7%
|
$388,900
|
3.0%
|
16.1%
|
Houston,
TX
|
$125,300
|
12.7%
|
71.4%
|
$331,200
|
2.6%
|
28.3%
|
Washington,
DC
|
$238,700
|
3.1%
|
34.1%
|
$666,600
|
-0.1%
|
13.9%
|
Miami-Fort
Lauderdale, FL
|
$138,100
|
10.1%
|
102.2%
|
$463,000
|
2.1%
|
39.2%
|
Atlanta,
GA
|
$107,300
|
12.8%
|
77.9%
|
$366,500
|
4.0%
|
41.1%
|
Boston, MA
|
$283,400
|
8.5%
|
41.5%
|
$732,600
|
5.2%
|
33.9%
|
San Francisco,
CA
|
$530,900
|
9.5%
|
103.3%
|
$1,559,400
|
11.6%
|
70.4%
|
Detroit,
MI
|
$53,700
|
17.2%
|
46.3%
|
$286,600
|
4.0%
|
41.3%
|
Riverside,
CA
|
$226,900
|
9.7%
|
87.2%
|
$498,500
|
6.9%
|
46.8%
|
Phoenix,
AZ
|
$166,900
|
9.8%
|
85.4%
|
$410,200
|
4.7%
|
30.5%
|
Seattle,
WA
|
$298,300
|
12.1%
|
79.7%
|
$832,900
|
13.5%
|
67.9%
|
Minneapolis-St Paul,
MN
|
$171,700
|
6.2%
|
48.0%
|
$391,800
|
3.0%
|
26.4%
|
San Diego,
CA
|
$416,300
|
7.7%
|
64.6%
|
$876,700
|
6.9%
|
37.8%
|
St. Louis,
MO
|
$77,400
|
6.5%
|
20.0%
|
$280,400
|
-1.8%
|
17.4%
|
Tampa, FL
|
$110,500
|
20.4%
|
95.2%
|
$337,400
|
1.5%
|
43.1%
|
Baltimore,
MD
|
$138,700
|
3.8%
|
13.9%
|
$452,100
|
-0.3%
|
10.8%
|
Denver, CO
|
$267,600
|
9.5%
|
92.8%
|
$577,600
|
5.7%
|
45.9%
|
Pittsburgh,
PA
|
$75,400
|
9.9%
|
27.4%
|
$249,600
|
2.1%
|
21.9%
|
Portland,
OR
|
$274,300
|
8.3%
|
80.3%
|
$559,600
|
2.6%
|
50.9%
|
Charlotte,
NC
|
$107,900
|
16.9%
|
40.1%
|
$347,900
|
5.5%
|
30.6%
|
Sacramento,
CA
|
$270,400
|
9.8%
|
101.0%
|
$565,200
|
5.6%
|
44.1%
|
San Antonio,
TX
|
$103,500
|
18.4%
|
50.4%
|
$296,600
|
5.7%
|
27.0%
|
Orlando,
FL
|
$126,300
|
12.6%
|
86.3%
|
$334,400
|
0.9%
|
35.5%
|
Cincinnati,
OH
|
$95,400
|
8.8%
|
28.1%
|
$276,100
|
3.4%
|
20.7%
|
Cleveland,
OH
|
$70,400
|
8.0%
|
19.3%
|
$250,100
|
3.4%
|
18.4%
|
Las Vegas,
NV
|
$151,700
|
19.9%
|
104.4%
|
$368,300
|
9.7%
|
59.6%
|
Columbus,
OH
|
$94,900
|
12.3%
|
40.2%
|
$312,600
|
6.5%
|
31.8%
|
San Jose,
CA
|
$751,000
|
18.0%
|
87.6%
|
$2,096,700
|
18.9%
|
73.8%
|
Austin, TX
|
$189,000
|
8.1%
|
57.9%
|
$479,900
|
5.5%
|
37.8%
|
Virginia Beach,
VA
|
$142,200
|
2.5%
|
9.9%
|
$359,400
|
0.5%
|
9.0%
|
Nashville,
TN
|
$147,700
|
14.3%
|
58.5%
|
$407,800
|
6.7%
|
41.2%
|
Zillow
Zillow is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i
https://www.zillow.com/research/black-hispanic-home-wealth-16753/
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SOURCE Zillow