Just as US home values were accelerating, along came the virus

It’s taken almost two years but finally, in February, the US saw an increase in annual home value growth compared to the previous month.

Zillow’s latest reading of the US housing market shows that the typical home value is now $247,084, a 3.9% increase from a year ago.

But it may only be a short-lived pause from the slower trend as the COVID-19 coronavirus disrupts the US housing market. The depth of that disruption is still unknown and had limited impact on February activity.

That said, Zillow’s analysis of previous pandemics shows that, despite a decline in home sales, home values typically held up well. The market also generally recovered well once the pandemic subsided.

Uncharted territory

A decline in home sales would come off the back of strong data from February with lower inventory exacerbating the rising prices.

"Homebuyers were flocking to the market this winter with their finances buttressed by the longest economic expansion in memory, and with their purchasing power magnified by rock-bottom mortgage interest rates,” said Jeff Tucker, economist at Zillow. “Now, though, as so much is uncertain, we are entering uncharted territory for the housing market."