What Is the Average Appreciation of Real Estate in the U.S.?
It's no secret the real estate market is on fire. Over the past year, the average appreciation of real estate has increased 14.5%, a staggering number compared to historical performance. 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. This article will take a closer look at historical appreciation rates while explaining what drives changes in median home value over time, including today. Tracking home appreciation  Price appreciation is a term used to describe an increase in value of an asset over time. In real estate, this 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; however that isn't always the case. Supply and demand is the greatest driver of real estate appreciation. When there is high demand and low supply, commonly referred to as a seller's market, home-value appreciation increases. Conversely, when there is high supply and low demand, often referred to as a buyer's market, property prices remain stagnant or decrease. When we look at historical appreciation rates as they coincide with important economic events, you can see home appreciation year over year changes significantly.