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2021 Home Price Appreciation Forecast

Before we look where home values are going, let us look at where they have been.  In the recent edition of the Home Price Insight Report by CoreLogic, nationally home values have increased by 8.2% over the last 12-months (NOTE: 8.2% increase is based on analysis through November 2020). This increase in home values has been influenced by the lack of availability of for sale homes in the market and the record low mortgage rates available in the market today and by the emergence of first-time homebuyers entering the market.

Increasing buyer demand in 2021 with for sale inventory in short supply should positively impact home values in 2021.  If the imbalance of supply of homes and demand for homes continues, the most aggressive appreciation forecast  in 2021 could end up to be the most conservative projection. To accurately forecast where home values will go in 2021, the Martini Mortgage Group seeks the data from 7 industry resources/analysts: National Association of Realtors (NAR), Zelman,, Freddie Mac, CoreLogic, Fannie Mae and the Mortgage Bankers Association (MBA).  Below is the 2021 home Price appreciation forecast from these 7 entities. 

Is the NAR analyst correct and will the home price appreciation in 2021 be 6%? Is the MBA analyst correct and will 2021 home price appreciation be 2%?  Here is what Chief Mortagage Strategist, Kevin Martini shared:

The consensus is that home values will appreciate in 2021. Since there are some analysts that are bullish and  some analyst that are bearish, it is best to look at the average of all forecasts and that puts the 2021 home price appreciation forecast at 3.9%.

~ Kevin Martini

A Mortgage Strategist Opinion by Kevin Martini

Over the past 12-months, low mortgage rates have been one of the drivers to buyer demand however it is not the only driver in the market today.  The average age of a first-time homebuyer is 33.  Older millennials are buying homes and there are more 32-year olds than there are 33-year olds & there are more 31-year olds than there are 32-year olds.  Yes, mortgage rates are about 1 full percentage point lower at the start of 2021 versus where home loan rates were at the start of 2020 but lower mortgage rates are not the only thing causing this spike in housing demand — new buyers entering the market must be considered and the surge of older millennial entering the housing market may continue to put pressure on the limited number of homes for sale.  

Kevin Martini

Kevin Martini is the founder of the Martini Mortgage Group; Branch Manager and Senior Mortgage Strategist with Cardinal Financial Company; a husband to a magnificent lady who was his high school sweetheart; a father of 2 amazing men; a son to tremendous parents; a grandfather to a beautiful grandchildren; a loyal friend; a trusted and experienced advisor to the families he serves.

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