Article Courtesy of Keeping Current Matters/The KCM Blog
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 bidding wars that have driven home prices up over the past twelve months. However, that increase in inventory has yet to materialize. The National Association of Realtors (NAR) reports that there are currently 410,000 fewer single-family homes available for sale than there were at this time last year.
This has forced those who made appreciation forecasts this past January to amend those projections. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, the National Association of Realtors, and Zelman & Associates
have all adjusted their numbers upward after reviewing first quarter
housing data. Here are their original forecasts and their newly updated
projections:
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. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.
Bottom Line
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.
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