U.S. home values increase for the second straight year

Home values posted their first year-over-year increase since 2007 in the second quarter as the U.S. property market began to lift off a bottom, according to the latest Zillow Home Value Index released this morning. The home value index rose to $149,300, a 0.2% increase from the second quarter of 2011, according to the property-data company. Residential values have gained for four months in a row, the Seattle-based firm reports. Of the 167 markets tracked by Zillow, 53 posted annual increases. Home prices have begun to rise amid an increase in demand, interest rates at record lows and a tight supply of properties for sale. The residential market is showing strength even as job growth weakens and concerns that the European debt crisis will hurt the U.S. economy, Stan Humphries, Zillow’s chief economist tells Bloomberg. The country’s unemployment rate has exceeded 8% for 41 straight months now. April, May and June was “a really solid second quarter in the midst of some economic headwinds, which indicates the housing market has some organic fundamental strength on its own,” Humphries says. “The housing market has finally turned a corner.” The Federal Housing Finance Agency also reports today that U.S. house prices rose 0.8% on a seasonally adjusted basis from April to May. See the complete Zillow report here.