Wondering if the income needed to buy a home in the top 50 metro areas is starting to decline? Hint: Not yet.

Wondering if the income needed to buy a home in the top 50 metro areas is starting to decline? Hint: Not yet.

Home Value Recovery 99% Complete

99 of the top 100 metro areas have achieved full recovery of previous "boom-era" peak home values

June 1, 2021 - HSH.com releases today its latest Home Price Recovery Index, a quarterly analysis of changing home values in the nation’s top 100 metropolitan housing markets. Developed by HSH, a premiere consumer destination for mortgage information and rate shopping since 1979, the HPRI reveals markets with home prices at or above previous "boom era" peaks and those that have not yet completely recovered lost value.

The latest study examines home values in the largest 100 metropolitan areas from 1991 through the first quarter of 2021. Strong home price gains continued in the first quarter of 2021, pushing six of the remaining seven metro areas that were still below previous peak values into fully-recovered territory.

HSH.com’s "Home Price Recovery Index" uses the Federal Housing Finance Agency's (FHFA) Home Price Index for insight on housing market values. By this reference, 98 of the 100 largest metro areas saw quarter-to-quarter increases in home values, with just Honolulu (HI) and Baton Rouge (LA) posting minor value declines (-0.06% and -0.77% respectively) in the first quarter of 2021 compared to the fourth quarter of 2020.

Although sales have become more tempered of late, the housing market continues to run at a very strong pace. Home prices are currently at or near record highs; inventories of homes to buy remain very lean, and though a touch slower now than at times late last year, sales of both new and existing homes remain close to 15-year highs. On a year-over-year basis, all 100 metros tracked sported home value increases, ranging from 0.41% (Honolulu, HI) to as much as 24.30% (Boise City, ID), with 75 metros putting up double-digit annual gains in prices.

These gains enabled six of the remaining seven metro areas to reach or surpass values last seen during boom-era peaks some 13 or 14 years ago. They are:

  • Stockton, CA
  • Bridgeport-Stamford-Norwalk (CT)
  • New Haven-Milford (CT)
  • Lake County-Kenosha County (IL-WI)
  • Elgin (IL)
  • Cape Coral-Fort Myers (FL)

After years of economic expansion and improving real estate markets, just one of the nation’s most populated metro areas has not yet seen values recover to previous highs.

HSH.com’s "Home Price Recovery Index" uses the Federal Housing Finance Agency's (FHFA) Home Price Index for insight on changes to housing market values.

Areas with greatest pricing recovery Percent value now above “boom era” price peak
1. Austin-Round Rock-Georgetown, TX 132.22%
2. Denver-Aurora-Lakewood, CO 125.15%
3. Boise City, ID 97.72%


Areas with largest recovery gaps Percent increase needed to regain price peak
1. Bakersfield, CA 4.15%

It is important to note that many markets have seen significant price recoveries since hitting their bottom values, with a number of metros needing to more than double their low water mark to achieve recovery; these markets lost 50% or more of their peak value in the subsequent housing bust. In fact, the Bakersfield (CA) metro area has seen more than a doubling in value from ‘bust-era’ bottom home values, yet still has a value gap to close.

Important takeaways

  • Record low mortgage rates have stoked gains in home values. 86 markets now have values that are more than 10% above their previous peak values, an increase of 18 metros compared against the same period one year ago.

  • No metros now have a double-digit value gap yet to fill. The Bakersfield, CA metro remains the only market with the any chasm at all, but even then has closed the gap from a 16.64% deficit a year ago to today's 4.15% level, so full recovery may be only one or perhaps two quarters away.

  • Although there were no new entrants into the most-recovered group, a new leader has emerged. The Austin-Round Rock-Georgetown, TX pushed its way past long-time king Denver-Aurora-Lakewood CO to take the #1 position with home prices that are now 132.22 percent above their previous "boom-time" peak (2008). Denver-Aurora-Lakewood, CO was bumped to #2, while the Boise City (ID) moved up two slots to take the #3 position. The ranks of four of the remaining "top ten" markets shuffled around as well.

  • The markets with the largest gap yet to overcome has now been reduced to just one. The Bakersfield, CA metro area needs another 4.15% gain in value to join the others, and will likely do so in just another quarter or two.

See the full analysis here: https://www.hsh.com/finance/real-estate/home-price-recovery.html

Homeowners interested in seeing how their home's value has changed over time are encouraged to use HSH.com's free “Home Value Estimator.” The tool allows users to select their market from 100 metropolitan areas and enter the time frame in which they've owned their home; changes in the home’s value during this ownership period are revealed and a current price estimate based on housing cost trends in the selected metro area is provided.

About HSH.com
Since 1979, HSH.com has been a trusted mortgage resource for consumers seeking independent, objective and expert-level mortgage information, forecasts and data. HSH.com offers unique analysis, calculators, tools and content to help demystify first mortgages, home equity loans and lines of credit, reverse mortgages and more. HSH.com empowers homebuyers and homeowners to fully understand their home financing choices and provide opportunities for them to engage with partners to execute their transactions.

Website: https://www.hsh.com
Twitter: @HSHassociates
Facebook: https://www.facebook.com/HSHassociates/

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