What exactly is home price appreciation? Simply put, it is the increase in value of a home over time. Appreciation can occur for many reasons, including rising demand, low supply, or as a result of inflation or interest rates.
In the current real estate market, buyer demand is very high while inventory has remained low. This has contributed to home price appreciation over the last year and several months — buyers have been willing to spend more to attain the scarce product they desire, so prices have risen. Buyers compete with one another, which leads to bidding wars, which leads to much higher sale prices.
According to Quicken Loans, in a normal year, the national average home price appreciation rate is between 3-5%. However, in today’s market, prices are appreciating much faster than usual due to skyrocketing buyer demand. For the remainder of 2021, experts project that average home price appreciation will settle at around 11.5% — a significant increase over the percentage in a typical year.
For sellers, this is great news. Such rapid price appreciation helps give your equity a boost, meaning your house may be worth more than you realize. You can use your cumulative equity and roll it over to your dream home, or you can use it to achieve a personal goal, like funding your child’s education or starting a business.
However, while price appreciation is strong at the moment, economists agree that next year it will start to appreciate at a more normal pace. The bottom line? If you list your home sooner rather than later, you’re likely to see more money in your pocket.
If you are ready to learn more about how you can use the current market to your advantage in selling your home, contact me today
Source: Keeping Current Matters