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What’s Causing Ongoing Home Price Appreciation?

July 25, 2022 By Tami Savage

What’s Causing Ongoing Home Price Appreciation?

If you’re thinking about making a move, you probably want to know what’s going to happen to home prices for the rest of the year. While experts say price growth will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won’t fall. Here’s a look at two key reasons experts forecast continued price growth: supply and demand.

While Growing, Housing Supply Is Still Low

Even though inventory is increasing this year as the market moderates, supply is still low. The graph below helps tell the story of why there still aren’t enough homes on the market today. It uses data from the Census to show the number of single-family homes that were built in this country going all the way back to the 1970s.

Single-Family Housing Units Completed

The blue bars represent the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That’s because buyer demand was so high due to loose lending standards that enabled more people to qualify for a home loan.

The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses – and that led to a long period of underbuilding of new homes. And even as more new homes are constructed this year and in the years ahead, this isn’t something that can be resolved overnight. It’ll take time to build enough homes to meet the deficit of underbuilding that took place over the past 14 years.

Millennials Will Create Sustained Buyer Demand Moving Forward

The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, data tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years (see graph below):

U.S. Population by Generation

Odeta Kushi, Deputy Chief Economist at First American, explains:

 “. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.”

That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate says:

“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”

What This Means for Home Prices

If you’re worried home values will fall, rest assured that experts forecast ongoing home price appreciation thanks to the lingering imbalance of supply and demand. That means home prices won’t decline.

Bottom Line

Based on today’s factors driving supply and demand, experts project home price appreciation will continue. It’ll just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels.

Tagged With: For Buyers, For Sellers, Housing Market Updates, Pricing

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The market has been on a roller coaster lately.  Super excited about the mortgage rate drop on August 4, 2022.  So we'll take a moment to look at 
• the mortgage rates week-to-week, 
• review the latest data from NAR on pending and existing home sales, and
• see/hear what some of the experts have stated.

Digital Business Card: https://tamisavage.com/bc  (so you can reach out, find me on social media platforms, and more)
National Housing Market Update August 2022
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_rnqzfAO8BRw
Don't let inflation delay your homebuying plans. Let's connect so you can start the process today.

Source for Data in Video: https://apnews.com/article/key-inflation-report-highest-level-in-four-decades-c0248c5b5705cd1523d3dab3771983b4
How Homeownership Can Help Shield You from Inflation
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_AROdzHn8CQw
Want to know if we’re in a housing market correction right now? 🏡  Check out the video to see what the experts say.  (Decided to do something a bit different and certainly more fun.  Went to Poole's Mill Park (Ball Ground, GA) to shoot this housing market update video.)

🤝 I'm here to help with your real estate goals, so reach out if there's anything I can do.

For more information:
📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
📧  tami@tamisavage.com
🌐 www.tamisavage.com


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I'm Tami Savage, a local Realtor® with eXp Realty in Cumming, GA. We lived on the southside of Metro Atlanta in Fayette County, GA (Peachtree City & Fayetteville) for 19 years then moved away for about 5 years.  Georgia recently called us home, we bought a house in west Forsyth this past Winter.  Excited to get to know the area, community, businesses around, and more.  

My goal is to present helpful information with an emphasis on the Real Estate market (of course) but also highlighting Cumming, Canton, Ball Ground, Milton/Alpharetta, and surrounding areas.  

Hit the subscribe button to get real estate info every week. 

Want more info ... 
check out my digital business card:   https://tamisavage.com/bc

📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
National Housing Market Update for end of July 2022
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_vl9R6_iverE
Want to know what the future holds for rates, prices, and inventory? Let's connect so you have a trusted advisor to answer your housing market questions.

Sources for Data in Video
• https://www.marketwatch.com/picks/until-inflation-peaks-mortgage-rates-wont-either-we-asked-3-economists-and-real-estate-pros-will-mortgage-rates-climb-higher-this-summer-01655941487
• https://twitter.com/RDC_Economics/status/1542511111852793857
• https://www.bankrate.com/real-estate/housing-market-predictions/
Expert Insights on Where the Housing Market Is Heading
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_HYD_ew9qnzM
Today's market is at a turning point. Let's connect so you have an expert in your corner when you sell your house.
Lean on a Real Estate Expert When You Sell in Today's Shifting Market
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_2Cqf4nsDEuQ
Getting pre-approved is a great opening play as a homebuyer. Let's connect so you have a strategy in place that helps you feel confident in your home search.
Pre-Approval Is a Strategic Move When You're Buying a Home
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_4kbQ0EiCroQ
Is it a good idea to buy a house now? 💰🏡

Check out the video to see what the experts say and see the mortgage changes throughout 2022 so far. 📈

🤝 I'm here to help with your real estate goals, so reach out if there's anything I can do.

For more information:
📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
📧  tami@tamisavage.com
🌐 www.tamisavage.com


-------------------------------------------------------------------


I'm Tami Savage, a local Realtor® with eXp Realty in Cumming, GA. We lived on the southside of Metro Atlanta in Fayette County, GA (Peachtree City & Fayetteville) for 19 years then moved away for about 5 years.  Georgia recently called us home, we bought a house in west Forsyth this past Winter.  Excited to get to know the area, community, businesses around, and more.  

My goal is to present helpful information with an emphasis on the Real Estate market (of course) but also highlighting Cumming, Canton, Ball Ground, Milton/Alpharetta, and surrounding areas.  

Hit the subscribe button to get real estate info every week. 

Want more info ... 
check out my digital business card:   https://tamisavage.com/bc

📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
National Housing Market Update for mid-July 2022
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_Dqc2-H0E9mU
For the next five years, experts say home prices will continue to rise. Let's connect if you're ready to invest in homeownership and grow your wealth.

Sources used for data:
https://pulsenomics.com/surveys/#home-price-expectations
Home Price Appreciation Helps Build Your Wealth
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_C8vHJlhf4q0
Americans rank homeownership as the top sign of financial success. Let's connect if you're dreaming of buying a home this year.

Read the article: https://tamisavage.com/more-americans-choose-real-estate-as-the-best-investment-than-ever-before/

Sources used for data:
https://www.bankrate.com/mortgages/homeownership-remains-centerpiece-of-american-dream/
Homeownership Is Still the American Dream
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_DhSRSEbnze8
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