Is Home Price Appreciation Accelerating Again?

<article class="post-2122 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2122"><span class="entry-date">April 29, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Is Home Price Appreciation Accelerating Again?</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=Is+Home+Price+Appreciation+Accelerating+Again%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fis-home-price-appreciation-accelerating-again%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Is Home Price Appreciation Accelerating Again? | 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/2021/04/28134947/20210429-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134947/20210429-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134947/20210429-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>At the beginning of the year, industry forecasts called for home price appreciation to slow to about half of the double-digit increase we saw last year. The thinking was that inventory would increase from record-low levels and put an end to the <a href="https://www.simplifyingthemarket.com/2021/04/02/buyer-competition-is-good-news-for-sellers-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">bidding wars</a> that have driven home prices up over the past twelve months. However, that increase in inventory has yet to materialize. The <em>National Association of Realtors</em> (NAR) <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-03-2021-single-family-only-2021-04-22.pdf">reports</a> that <strong>there are currently 410,000 fewer single-family homes available for sale</strong> than there were at this time last year.<span id="more-44283"></span></p>
<p>This has forced those who made appreciation forecasts this past January to amend those projections. The <a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary"><em>Mortgage Bankers Association</em></a>, <a href="https://www.fanniemae.com/media/38961/display"><em>Fannie Mae</em></a>, <a href="http://www.freddiemac.com/research/forecast/index.page"><em>Freddie Mac</em></a>, the <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-Q1-2021-us-economic-outlook-01-30-2021.pdf"><em>National Association of Realtors</em></a>, and <a href="https://www.zelmanassociates.com/"><em>Zelman &amp; Associates</em></a> have all adjusted their numbers upward after reviewing first quarter housing data. Here are their original forecasts and their newly updated projections:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134949/20210429-MEM-Eng-1.png"><img alt="Is Home Price Appreciation Accelerating Again? | Simplifying The Market" class="aligncenter wp-image-44285" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134949/20210429-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134949/20210429-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/28134949/20210429-MEM-Eng-1-400×300.png 400w" width="650"/></a>Even with the increases, the updated projections still don’t reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. <a href="https://www.simplifyingthemarket.com/2021/04/27/will-the-housing-market-maintain-its-momentum/?a=712984-fa409495d5d70154d03a25e81e9540e2">Demand</a> will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.</p>
<h3><strong>Bottom Line</strong></h3>
<p>Entering 2021, there was some speculation that we might see price appreciation slow dramatically this year. Today, experts believe that won’t be the case. Home values will remain strong throughout the year.</p>
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