The last year has been focused on how well the residential real estate market performed. Home price appreciation is one of the main storylines. According to recent indices, house prices are increasing at a breakneck speed this year.
Here are the most recent percentages for year-over-year price appreciation:
- The House Price Index (HPI) from the Federal Housing Finance Agency (FHFA): 18.8%
- The S. National Home Price Index from S&P Case-Shiller: 18.6%
- The Home Price Insights Report from CoreLogic: 18%
Every price range and every part of the country has seen similar increases.
Every price point has seen an increase
According to the latest Home Price Index from CoreLogic, each price range is showing at minimum a 19% increase year-over-year:
Every Region in the Country Has Seen Gains
Across the country, every region is seeing at least a 14.9% increase in home price appreciation, according to the Federal Housing Finance Agency (FHFA):
Increases Are Across Each of the Top 20 Metros in the Country
According to the U.S. National Home Price Index from S&P Case-Shiller, major metro areas are experiencing at least 13.3% price growth (see graph below):
What About Price Appreciation in 2022?
Prices are determined by the balance between available and desired supplies. Over the previous 18 months, there has been a lot of interest in single-family homes.
The supply of houses for sale was at historic lows. However, there is some good news on the supply side.
“432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.”
There will, however, still be a shortage of supply compared to demand in 2022. CoreLogic reveals:
“Given the widespread demand and considering the number of standalone homes built during the past decade, the single-family market is estimated to be undersupplied by 4.35 million units by 2022.”
However, according to most predictions, home price growth may moderate in 2022. The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, predicts a 5.12% appreciation rate in 2022.
Here are the 2022 predictions for home appreciation from the four other major organizations:
- The National Association of Realtors (NAR): 4.4%
- The Mortgage Bankers Association (MBA): 8.4%
- Fannie Mae: 5.1%
- Freddie Mac: 5.3%
When compared to the previous year’s highs, home price appreciation is expected to decelerate in 2022. However, there are expectations that 2022 appreciation will be greater than the average of 4.1% over the last 25 years.
In the End
If you own a property for at least a year, your household wealth has significantly increased, and there will be another significant increase in 2022. Consider purchasing now because prices are expected to rise even further through at least the next year.