What Is The Average Appreciation of Real Estate in the U.S.?
The current average appreciation rate is 14.5%, a stark difference from 4% in 2019.
It's no secret the real estate market is on fire. While many homeowners and real estate investors look to the average home-price valuation as an indicator for future value, it's important to remember that housing prices and the rate they appreciate can change dramatically year over year.
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Tracking Home Appreciation
In real estate, price appreciation directly relates to the value of a property. Which is measured by comparing the change in median home value from the previous year. In an ideal market, home appreciation should keep pace with inflation, meaning the value of the home is increasing as much as the value of the dollar is decreasing.
What Drives Home Appreciation?
Supply and demand is the greatest driver of real estate appreciation. When there is high demand and low supply, home-value appreciation increases. If there is high supply and low demand, property prices remain stagnant or decrease. Prior to the COVID-19 pandemic, the median price increased 4% from January 2019 to 2020.
Current Real Estate Appreciation
As of April 2021, the national appreciation rate was 2% month over month and 14.5% year over year. Then by May 2021, according to Labor statistics, the inflation rate jumped to 5%. Appreciation rates are constantly changing. Analyzing rates on a local level will give a more accurate idea for the average real estate appreciation at a given moment.
July 04, 2021 by Liz Brumer
Randy Byrd, Team Leader & Coach
The Byrd House Team - Brokered by eXp Realty, License# 01878277
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