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% in value, compared to a 3.6% gain for the most expensive homes. Over the past five years, the difference is even more noticeable -owners of starterr homes have seen their equity grow by 44.4%, while owners of top-tier homes have gained 26.6%.
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 worth. 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.
Wallingford PA Real Estate – Wallingford, PA 19086