You may have noticed lately that home prices have gone up in your neighborhood—in some areas by a lot. But that’s not just true anecdotally; the national housing market data is telling a similar story.
According to the Case-Shiller Composite 20 Home Price Index, which measures the value of residential real estate in 20 major U.S. metropolitan areas, home prices are the highest they’ve ever been. Compared to a year ago, they have risen roughly 17%. As shown on our featured chart above (bottom clip), this is tied for the fastest rate of appreciation on record.
The reason, it seems, is a shortage of homes, which economists estimate to be anywhere from 5.5 million to 6.8 million. What does this mean going forward? Well, all else equal, too much demand outpacing too little supply leads to higher prices. So, we’ll likely see home prices (and rents) continue to rise in the coming years.
This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation.
Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.