Home Price Appreciation: What It Means For Sellers
“Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease in value over time.”
The national average home price appreciation rate is between 3-5% in a typical year (Source: Quicken Loans). Today, home prices are appreciating well beyond the norm thanks to high demand.
The current average forecast of nearly 11.5% is significant compared to the normal pace of 3-5% appreciation per year. This means that a seller's house may be worth more than one realizes with the current rise in prices. The price appreciation even boosts your equity!
To find out more about the dynamics of home equity here.