Home Prices: What Happened in 2020? What Will Happen This Year?

<article class="post-2038 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2038"><span class="entry-date">March 2, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Home Prices: What Happened in 2020? What Will Happen This Year?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Home+Prices%3A+What+Happened+in+2020%3F+What+Will+Happen+This+Year%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhome-prices-what-happened-in-2020-what-will-happen-this-year%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Home Prices: What Happened in 2020? What Will Happen This Year? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145756/20210302-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145756/20210302-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145756/20210302-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>The real estate market was on fire during the second half of 2020. Buyer demand was way up, and the supply of homes available for sale hit record lows. The price of anything is determined by the supply and demand ratio, so home prices skyrocketed last year. Dr. Lynn Fisher, <em>Deputy Director</em> of the <em>Federal Housing Finance Agency</em> (FHFA) <em>Division of Research and Statistics</em>, <a href="https://www.fhfa.gov/AboutUs/Reports/Pages/US-House-Price-Index-Report-2020-Q4.aspx">explains</a>:<span id="more-43941"></span></p>
<blockquote>
<p><em>“House prices nationwide recorded the largest annual and quarterly increase in the history of the FHFA Home Price Index. Low mortgage rates, pent up demand from homebuyers, and a limited housing supply propelled every region of the country to experience faster growth in 2020 compared to a year ago despite the pandemic.” </em></p>
</blockquote>
<p>Here are the year-end home price appreciation numbers from the FHFA and two other prominent pricing indexes:</p>
<ul>
<li>
<em>Federal Housing Finance Agency</em> <a href="https://www.fhfa.gov/AboutUs/Reports/Pages/US-House-Price-Index-Report-2020-Q4.aspx">House Price Index Report</a>: 10.8%</li>
<li>
<em>CoreLogic</em> <a href="https://www.corelogic.com/insights-download/home-price-index.aspx">Home Price Insights</a>: 9.2%</li>
<li>
<em>S&amp;P Case-Shiller</em> <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210223-1321360/1321360_cshomeprice-release-0223.pdf">U.S. National Home Price Index</a>: 10.4%</li>
</ul>
<p>The past year was truly a remarkable time for homeowners as prices appreciated substantially. Lawrence Yun, <em>Senior Economist</em> at the <em>National Association of Realtors </em>(NAR), <a href="https://www.thedenverchannel.com/news/national/soaring-housing-prices-during-pandemic-may-point-to-split-economic-recovery">reveals</a>:</p>
<blockquote>
<p><em>“A typical homeowner in 2020, just by being a homeowner, would have <strong>accumulated around $24,000 in housing wealth</strong>.”</em></p>
</blockquote>
<h4><strong>What will happen with home prices this year?</strong></h4>
<p>Many experts believe buyer demand will soften somewhat as mortgage rates are poised to <a href="https://www.simplifyingthemarket.com/2021/02/23/the-reason-mortgage-rates-are-projected-to-increase-and-what-it-means-for-you/?a=712984-fa409495d5d70154d03a25e81e9540e2">bump up</a> slightly. Some also believe the inventory challenge will ease as <a href="https://www.simplifyingthemarket.com/2021/02/25/are-there-going-to-be-more-homes-to-buy-this-year/?a=712984-fa409495d5d70154d03a25e81e9540e2">more listings</a> come to market this year.</p>
<p>Based on this, most forecasters anticipate we’ll see strong appreciation in 2021 – <em>but not as strong as last year</em>. Here are seven prominent groups and their projections:</p>
<p><a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145759/20210302-MEM-Eng-1.png"><img alt="Home Prices: What Happened in 2020? What Will Happen This Year? | Simplifying The Market" class="aligncenter wp-image-43943" decoding="async" height="366" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145759/20210302-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145759/20210302-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/01145759/20210302-MEM-Eng-1-533×300.png 533w" width="650"/></a></p>
<h3><strong>Bottom Line</strong></h3>
<p>Home price appreciation will be strong this year, but it won’t reach the historic levels of 2020. Let’s connect if you’d like to find out what your house is currently worth in our local market.</p>
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