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
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
, 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
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.
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.