What’s Happening with Home Prices?

Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.

How much have home values appreciated over the last 12 months?

According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):What’s Happening with Home Prices? | MyKCMThe increase in the rate of appreciation that’s shown by CoreLogic coincides with data from the other two main home price indices: the FHFA Home Price Index

and the S&P Case Shiller Index

.

The last year has shown tremendous home price appreciation, which is resulting in a major gain in wealth for homeowners through rising equity.

What’s happening with home prices right now?

All three indices mentioned above also show that while appreciation is in the high double digits right now, that price acceleration is beginning to level off (see graph below):What’s Happening with Home Prices? | MyKCMYear-over-year appreciation is still close to 20%, but it’s clearly plateauing at that rate. Many experts believe it will drop below 15% by the end of the year.

Keep in mind, that doesn’t mean home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.

What about next year?

The recent surge in prices is the result of heavy buyer demand and a shortage of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:

  1. Fannie Mae
  2. Freddie Mac
  3. Mortgage Bankers Association
  4. Home Price Expectation Survey
  5. Zelman & Associates
  6. National Association of Realtors

What’s Happening with Home Prices? | MyKCMWhile the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.

About the Author

Prior to joining the Beshara Team, Chris assisted local companies as a freelance brand and web designer. Self-taught in Adobe Illustrator and in understanding the fundamentals of technology, he has helped create successful marketing campaigns.

Chris has a love of advertising, technology and social media “know how”. These traits, combined with his drive to find marketing solutions, allow him to use his innate creative vision to think “outside the box” and capture the attention of an audience.

These traits make Chris the perfect candidate to assist our sellers with winning marketing campaigns and ensure their home receives maximum exposure to the most amount of buyers, every time.

Chris, and his wife Amy, live in East Cobb with their two dogs, Rosco and Riley.