Appreciation slowing to 3.7 percent in 2019 and to 2.7 percent by 2021

February 1, 2018

In the dozen years prior to the onset of the housing boom and bust (1987-1999), home values grew at an average annual pace of 3.6 percent.

If the recession and housing bust had never happened and home values had continued to grow at that same, steady pace year-after-year, the median U.S. home would have been worth about $214,500 as of the end of 2017.

When asked how recent passage of the new tax law impacted their overall outlook for U.S. home values over the next five years, 41 percent of panelists with an opinion said their outlook was more pessimistic, compared to 31 percent who said their outlook was more optimistic.

Of those with an opinion, 28 percent said their five-year outlook on home values was unchanged as a result of tax reform. On average, respondents said they expected home values to gain 4.8 percent in 2018, with annual appreciation slowing to 3.7 percent in 2019 and to 2.7 percent by 2021 before accelerating somewhat to 2.8 percent annual growth by 2022.

Panelists said they expect bottom-third, entry-level home values to grow 6 percent in 2018, down from 8.5 percent annual growth currently but still double the expected pace of top-third annual home value growth (expected to be 3 percent in 2018, down from 3.6 percent currently).

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