Home values in the United States increased, rising 0.5 percent from February to March, according to Zillow's first quarter Real Estate Market Reports[1]. This marks the largest monthly increase in the Zillow Home Value Index (ZHVI) since May 2006, when home values also rose 0.5 percent.

The ZHVI fell 3.1 percent year-over-year to $146,200.

Nineteen of the 30 metro areas covered by the Zillow Home Value Forecast[3] will reach a bottom in 2012, or have already reached a bottom. Several of those are expected to see significant home value increases in the next 12 months, including thePhoenix (6.5 percent), Miami-Ft. Lauderdale (5.6 percent) and Tampa (2.5 percent) metros[4], according to the forecast.

Twelve of the markets covered by the Zillow Home Value Forecast will experience home value declines in the next 12 months, although some of those are likely to reach a bottom in late 2012. Some metros, however, are anticipated to experience significant home value declines in the next 12 months, including the Atlanta metro, with home values falling 4.1 percent, and theChicago metro, where values are expected to decline 3.8 percent.

Nationally, the Zillow Home Value Forecast shows that home values will fall 0.4 percent over the next 12 months, with many months showing no change or slight appreciation late this year, suggesting that U.S. home values could reach a bottom in late 2012.  

"For people who have been waiting to time their home purchase close to market bottom, it's time to start shopping," said Zillow Chief Economist Dr. Stan Humphries. "When the bottom will hit will vary by market, and it's nearly impossible to time a purchase exactly right. But home prices are not the only part of the equation. Buyers also should take into account the possibility that rising mortgage rates could offset any further home value declines that may occur.

"From an economic perspective, the latter part of the first quarter is full of positive news as the spring selling season gets underway. While it is unlikely that national home values continue to rise at this rate through the rest of the spring and summer, it is undeniable that we are seeing sparks of life in the housing market."

Foreclosures

In the first quarter, the rate of homes foreclosed fell to 2009 levels, with 7.4 out of every 10,000 homes foreclosed, which is significantly down from 8.3 out of every 10,000 homes foreclosed in February.

"March's lower foreclosure rate does not show signs of the expected increase after the multi-state attorneys general settlement in February," Humphries said. "But we should take this news with a grain of salt, as there still exists the possibility for foreclosures to increase again."   

However, foreclosure re-sales rose to a new high, with 20.5 percent of all sales in March being foreclosure re-sales.