U.S. Home Values Gained $1.1 Trillion, Renters Paid Record $535 Billion in 2015

The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust inDecember 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006.

The dollar amount itself underscores the significance of housing to the U.S. economy. In the third quarter of 2015, the U.S. gross domestic product was $18.1 trillionⁱ, $10 trillion less than the total value of the housing stock.

“This reminds us of the large role housing plays in the overall economy,” said Zillow^® Chief Economist Dr. Svenja Gudell. “Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they’ve ever been. At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year.”

Housing value isn’t distributed equally across the country. California is home to about 12 percent of the U.S. populationⁱⁱ, but the state accounts for nearly a quarter of the country’s total home value, driven by highly valued markets like Los Angeles and San Francisco.

Total Rent Paid

Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record paceⁱⁱⁱ.  In all, renters spent $535 billion on rent in 2015 – nearly as much as the total budget of the Department of Defense ($575 billion)^iv,according to a new Zillow rentals analysis. In 2014, they spent $516 billion.

Renters of single-family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single-family home renters paying $245 billion.

Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 – about $56 billion.Los Angeles-area renters spent nearly $35 billion, and San-Francisco renters spent $17 billion. About two-thirds of the total rent paid in 2015 was spent in the 50 largest metros.

November Real Estate Market Report

Home values rose 3.9 percent annually in November to a Zillow Home Value Index^v of $183,000, according to Zillow’s November Real Estate Market Reports^vi. Denver home values grew fastest for the tenth consecutive month at 15.5 percent annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double-digit growth.

Rents also continued their steady climb, growing 3.8 percent annually to a Zillow Rent Index of $1,382^vii. The pace of rental appreciation has slowed over the past four months. Only San Francisco and Portland saw rents grow at a double-digit pace, as Denver and San Jose slipped back into single-digit growth.

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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. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.