Appreciation Rate Estimate
Appreciation is the tendency for home prices to go up over time.
Home prices can go up or down.
In some markets prices go up faster than others. In some markets prices do decline.
While the numbers vary depending on who does them, the overall consensus is the same: home prices, over long periods of time, go up.
A study I read in 2007, showed that home prices over the last 40 years have gone up, on average across the entire United States, approximately 6.5% per year. There were some down years, but overall prices went up approximately 6.5% per year.
As I write this some markets in the United States are seeing a decline in prices.
For the sake of the calculations and estimates on this website, we use a 5% appreciation rate (not the 6.5% that I mentioned above).
Could house prices in certain markets go down in the short term? Yes.
Could house prices in certain markets go down for several years? Yes.
Do I believe that house prices will go up in the long term? Yes.