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More than half of homes in the United States have lost value over the past year, representing the highest share of properties to depreciate in more than a decade.
A Zillow study found that about 53% of all U.S. homes have lost value since last year, an increase of 14% from last year. It is worth noting that such a large share has not been seen since the end of the Great Recession – around 2012 – when house prices and household wealth began a significant recovery.
Treh Manhertz, senior economics researcher at Zillow, said “homeowners may feel rattled,” but that’s more common in today’s cooler market environment than in recent years.
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Homes in Aldie, Virginia on Tuesday, February 20, 2024. (Photographer: Nathan Howard/Bloomberg via Getty Images / Getty Images)
Most homes have lost value since their peak, falling 9.7% on average. This figure is much higher than the 3.6% reported in spring 2022, but about the same as rates before the COVID-19 pandemic, according to the report. It remains well below the average drop of 27% recorded at the start of 2012.
A “for sale” sign on a house in Philadelphia, Pennsylvania. (Joe Lamberti/Bloomberg via Getty Images)
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Manhertz also noted that despite the increase in devalued homes, only “relatively few” are selling at a loss. Zillow said the value of the home between sales matters more than the overall loss in value.
“Home values have surged over the past six years, and the vast majority of homeowners still have significant equity. What we are seeing now is a normalization, not a crash,” he added.
In October, 4.1% of homes were worth less than when they were last sold, compared to 2.4% last year. However, it remains lower than the 11.2% of households in the same situation before the pandemic.
A sign is posted in front of a home for sale in San Rafael, California. (Justin Sullivan/Getty Images)
Data showed that home value appreciation nationwide has remained stable over the past year, but most homeowners have seen the value of their properties climb significantly since owning them. The median home value has jumped 67% since purchase, about eight and a half years ago.
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The Zillow report showed that some metro areas saw an even bigger surge due to supply constraints, with home values in Buffalo increasing 108%. Home values in San Jose jumped 97% and 95% in Providence, 90% in Columbus and 88% in San Diego.
Another factor driving up values in these areas is that homeowners in these locations tend to stay in their homes longer than average, according to Zillow.
