What's Happening with Home Prices?

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?

Home Price Index from CoreLogic, states that home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at a faster pace for each of the last eight months (see graph below):

What's Happening with Home Prices? | MyKCM

The 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 high home price appreciation, which is resulting in Homeowners receiving wealth in their rising equity.

What's happening with home prices right now?

 

All three points mentioned above show that while appreciation is in the high double digits right now, that the higher prices are beginning to level off. 

Remember,  that doesn't mean home values will go down. It means the rate of appreciation will slow down, yet stay well above the 25-year average of 5.1%.

 What about next year?

 Most experts believe that as more inventory comes to market ( 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. 

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.

What you saw in the recent market is the prices going up as a result of a lot of  buyer demand and a shortage of homes available on the market. 

 

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