Home Price Appreciation: What Will Happen in 2024?

February 9, 2022
Last updated:
February 1, 2024
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Over the past couple of years, home prices soared, giving homeowners a great opportunity to increase their home equity. Sellers who choose to sell their homes can also realize significant profits thanks to rapid price appreciation.

While home prices soared over the past few years, what are they expected to do in 2024? Will we see the same level of price increases over the next few months?

Home Price Appreciation Over the Recent Past

Home prices across the US have seen dramatic increases in value over the past few years. While the recent health crisis may have significantly impacted most other industries, it doesn’t seem to have much negative effect on the real estate industry. Instead, this sector has seen above-average gains over the recent past.

According to Zillow, home prices across the US increased around 45% from the beginning of 2020 to the end of 2021. Price increases were not nearly as prominent over the past year, with the national average price for a home increasing 2.6% YOY to the current $342,685.

This healthy growth in home prices was largely stimulated by low mortgage interest rates, tight inventory, and an improving economy. Having said that, mortgage rates have spared over the past year and a half, and now sit at 6.6% for a 3-year fixed-rate mortgage. Thankfully, rates have decreased a little since last fall and are expected to continue dipping throughout the year.

Home Appreciation Rates By Price Point

The following chart displays the rates of increase year-over-year from November 2022 to November 2023, according to the AEI Housing Center:

Price TierRate of Increase
Lowest price tier7.2%
Low- to middle-price tier5.7%
Middle- to moderate-price tier4.8%
High-price tier5.2%

Perhaps unsurprisingly, home price appreciation was highest in the lower-priced tier, given the higher affordability in this price range. Having said that, the gap in rates of appreciation among all four tiers is closing, which suggests that inventory is very tight at all price points.

Right now, there is only a 2.4-month supply of existing homes available for sale to meet current demand. That’s far below a balanced market, which is characterized by a 5- to 6-month supply.

Home Appreciation Rates By Zip Code

While every state has seen healthy gains in home prices over the past year, certain markets have been relatively stagnant over the course of the past year. Here are a few cities in WA State and their associated rates of increases/decreases in home prices over the past 12 months:

  • Seattle: -1.3%
  • Tacoma: +1.6%
  • Spokane: -0.9%
  • Kent: +1.3%
  • Everett: +3.7%

Home Appreciation Calculator

Both homeowners and buyers alike have a vested interest in how much home prices have increased over the past year.

Homeowners will want to know how much their homes are worth and the amount of equity they’ve managed to build up, and anyone looking to sell will want to have a clear idea of how much they can expect to fetch.

Buyers will want to understand how much homes are currently selling for in the areas they’re interested in to determine what they will be spending on a home purchase.

How to Calculate Home Price Appreciation

Regardless of the circumstances, it’s helpful to know how to calculate home price appreciation. Fortunately, it’s relatively easy to do. Simply divide the change in the value by the original cost and multiply by 100 to arrive at a percentage.

To illustrate, let’s say your home was originally worth $300,000 when you first bought it, and its current market value is $400,000. The calculations would be as follows:

  • Current value ($300,000) – original value ($200,000) = $100,000 (appreciation value)
  • Appreciation value ($100,000) ÷ current value ($300,000) = 0.33
  • 0.33 x 100 = 33%

Based on these figures, your home appreciated in price by 33% since it was first purchased.

If the thought of juggling a bunch of numbers seems daunting to you, there are handy house price calculators available online that allow you to simply plug in the appropriate figures, and the calculator will do all the complex stuff for you. Give the Federal Housing Finance Agency’s (FHFA) House Price Calculator a try.

What About Future Home Price Appreciation?

The above number provides you with an idea of how much your home has increased in value since you first bought it, but what about future price growth?

The following factors will have an effect in the value of your home in the future:

Making improvements. Upgrading your home adds instant value and equity to your home. Just be careful to choose the right projects and not to spend too much on renovations to ensure a high ROI.

Increasing square footage. Generally speaking, the larger a home is, the higher its value. If you add an addition — whether by adding a second storey to a bungalow or expanding the footprint of the home, for instance — you can effectively increase your home’s square footage and increase its overall value.

Maximizing energy efficiency. Homes that are cheaper to operate due to more energy-efficient systems and appliances can also increase in value.

Should You Buy a Home Now?

According to experts, home prices across the nation are expected to increase by a modest rate. While that may not be as high as years past, any appreciation is good for homeowners building equity.

Should you buy a home now? Yes, since it seems homes will continue to appreciate in 2024.

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Why Choose a Sammamish Mortgage?

At Sammamish Mortgage, we can help you get fully preapproved for a mortgage, even in the face of massive home appreciation rates.

Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get pre approved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.

Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

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