US Home Appreciation Rates
October 27, 2009 by danfullmer
Filed under ClariTree.com News Stories
How fast do homes appreciate historically in the US?
I had only found census data back to 1954 and some limited data for previous decades. I used some historical data that can be found to calculate annual home appreciation at 4.51% from 1960-2009 and dating back to the 1920’s homes have historically appreciated around 4.12% annually.
That data seems to point to appreciation between 1890 to 1930 period being really low which makes the overall averages less.
The data shows home appreciation for specific historical periods as follows :
|
1890 to 2009 |
2.96% |
|
1900 to 2009 |
3.74% |
|
1920 to 2009 |
3.53% |
|
1948 to 2009 |
4.08% |
If we divide the data to before WWII and after:
|
1890 to 1939 |
0.74% |
|
1940 to 2009 |
4.61% |
Or the past 100 years, 1909 to 2009: 3.43%
If you break the information down into decade chunks we will be able to see a few interesting points:
| 1890’s | 0.53% |
| 1900’s | 1.40% |
| 1910’s | 3.30% |
| 1920’s | -0.70% |
| 1930’s | -0.45% Limited data available before this time period |
| 1940’s | 8.16% The first full decade after the depression |
| 1950’s | 2.67% |
| 1960’s | 2.57% 50 year time frame 4.51% 1960 – 2009 |
| 1970’s | 8.12% Beginning of ramped inflation |
| 1980’s | 5.86% 30 year time frame 3.94% 1980 – 2009 |
| 1990’s | 2.84% |
| 2000+ | 3.14% |
Note that these numbers are all calculated using simple math and do not account for any inflationary adjustment.
So what does all this new data tell me? First it seems the long term historical home price appreciation is 3-4% range rather than 5%. The data from the range of 1890 to 1920 is much less relevant in today’s market. During that time period we were still transitioning in the world and it was a much different place. I think the past 30 years is much more realistic of history if we’re going to use it as a platform to try to predict what may happen in the future.
