High U.S. Home Prices? Not Compared to 2011

Notable home-price increases have occurred in small and large U.S. metros, but it hasn’t been even. In 477 U.S. cities, prices still haven’t hit their earlier peak.

NEW YORK – The intense housing market today still hasn’t brought back prices to their peak about 15 years ago in 477 U.S. cities. Zillow Group estimates that the typical home value at the end of April was below peak levels from the early 2000s’ housing explosion.

Home values in Detroit and Flint, Michigan, and Hartford, Connecticut, were among those below peak, while Chicago, Cleveland and Newark, New Jersey, have typical home values that topped their pre-crisis peaks for the first time in April.

Moreover, more than 400 of the cities have typical home values at least 80% of their pre-crisis peaks, which means appreciating home values could nudge many beyond their former peaks this spring or summer.

“The growth since 2006 has very much been a growth that’s associated with rising inequity,” says Professor Susan Wachter at the University of Pennsylvania’s Wharton School. “For homeowners, this has been a period of immense wealth appreciation – but in these cities and metros, homeowners have not participated in that” to the same degree.

The current boom has been atypically diffuse, with prices climbing rapidly and buyers waging bidding wars in big cities and small towns alike. Although many owners have built equity by paying off some of the principal on their mortgage loans, the National Association of Realtors estimates that about 86% of wealth appreciation for the typical homeowner between 2011 and 2021 stemmed from price growth.

Source: Wall Street Journal (06/04/22) Friedman, Nicole; Eisen, Ben

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