US Home Price Appreciation — Historical Returns and Regional Variation

## National home price appreciation The Case-Shiller national home price index shows US homes have appreciated at ~4.5% annually since 1987. Adjusted for 2.5% inflation, real appreciation is about 2% per year. From 2020–2023, pandemic-era demand drove unprecedented 20–30% appreciation in many markets. This was followed by stagnation or slight declines in rate-sensitive markets. ## Regional variation is enormous - **Sun Belt (Phoenix, Tampa, Nashville):** Strong job growth and migration drove massive appreciation - **California coastal:** High prices, constrained supply, but appreciation has slowed - **Midwest (Cleveland, Detroit):** Low price-to-income ratios, modest but steady appreciation - **NYC metro:** Long-term appreciation with high transaction costs eating returns ## Home as investment vs home as consumption A primary residence is primarily consumption, not investment. You live in it — you can't redeploy that capital without moving. Think of appreciation as a bonus, not the primary reason to buy. Buy because it fits your life and you can afford it.