The performance of the residential real estate market has been a major storyline over the past year. Home price appreciation is a key indicator. According to the most recent indices, home values are on the rise this year.
Here are the most recent percentages showing an increase in home prices year-over-year:
- The Federal Housing Finance Agency (FHFA), House Price Index (HPI): 18.8%
- The S. National Home Price Index from S&P Case-Shiller: 18.6%
- CoreLogic’s Home Price Insights Report: 18%
These dramatic increases can be seen in every price range and all parts of the country.
Increases Are Across Every Price Point
According to the latest Home Price Index from CoreLogic, each price range is seeing at least a 19% increase year-over-year:
Every Region in the Country are Seeing Growth
According to the Federal Housing Finance Agency, (FHFA), every region of the country has seen at least a 14.9% rise in home price appreciation.
There are increases in each of the top 20 metros in the country:
According to the U.S. National Home Price Index from S&P Case-Shiller, every major metro is seeing at least a 13.3% growth in prices (see graph below):
What Happens in 2022?
The balance of supply and demand determines the price. Over the past 18 months, single-family homes have been in high demand. The number of houses for sale was at historic lows. There are some positive signs on the supply side. Realtor.com reports:
“432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.”
However, there will be a shortage in supply relative 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, most forecasts predict that home prices will increase moderately in 2022. The Home Price Expectation Survey a survey of more than 100 economists, investment strategists, and housing market analysts calls for a 5.12% appreciation next year. Here are the 2022 home appreciation predictions from four major entities.
- The National Association of Realtors (NAR): 4.4%
- The Mortgage Bankers Association (MBA): 8.4%
- Fannie Mae: 5.1%
- Freddie Mac: 5.3%
In 2022, price appreciation will slow compared to 2021’s record highs. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years.
The Breakdown:
You’ve likely seen your household wealth increase significantly if you own a home in the last year. In 2022, you can expect a nice increase. Consider buying now if you are thinking about buying a home. Prices are expected to rise through at least 2022.
