Home for sale
A home for sale in North County. File photo by Chris Jennewein

Growth in home values continued to rise sharply in December as high demand for homes carried into winter, according to a Zillow real estate report.

Typical home values in the U.S. climbed to $266,104, up 8.4% from a year ago – the highest annual increase since January 2014. 

Home value growth over the last quarter in the U.S. was 3.2% – higher than at any time since the Zillow Home Value Index series began in 1996.

Many metro areas took part in this late surge, including San Diego, Phoenix and Salt Lake City. 

In San Diego:

  • The typical home value in December was $678,665, up 12.5% year over year, 1.7% since November and 5.1% since the third quarter.
  • Typical rent is $2,375, up 4.3% year over year.

“The housing market ended 2020 with an exclamation point, as home values rose sharply near the end of the year at their fastest quarterly rate on record,” said Jeff Tucker, senior economist at Zillow. “Sales are taking place at a rapid clip as momentum gathering in the market since June is still pushing forward at full force and is expected to continue for the foreseeable future. Although prices are skyrocketing, record-low mortgage rates keep bringing buyers to the table by keeping monthly payments in reach.”    

Rents nationwide are up 0.2% since November to $1,740, continuing a slow recovery from a yearly low in October of $1,728. Annual rent growth was stunted in 2020, rising just 0.8%, or $14, year over year.

In December 2019 rents were climbing at 3.5% annually.

For-sale listings’ median time on market for the U.S. stayed extremely short at 14 days, just one day longer than monthly lows in the fall. Newly pending sales are following seasonal trends, but remain elevated – up 21.7% compared to last year despite available inventory being down 26.6%.

Meanwhile, mortgage rates listed by third-party lenders on Zillow reached an all-time low of 2.63% on Dec. 18. Rates, though currently on an upward trend, are still far below long-term averages. 

Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Group Mortgages site by third-party lenders and reflect recent changes in the market.