With the Income You Need to Buy a Median-Priced Home rising, you may need to Learn About Adjustable Rate Mortgages to preserve affordability.

With the Income You Need to Buy a Median-Priced Home rising, you may need to Learn About Adjustable Rate Mortgages to preserve affordability.

Over 90% of Markets Achieve Full Home Value Recovery

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

March 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 fourth quarter of 2020. While gains remain uneven, home prices are rising strongly of late, allowing five new markets to join the the ranks of the recovered in the latest quarter.

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, and just one market posted a decline in home value in the fourth quarter of 2020 compared to the third.

The housing market is currently running strong, with record or near record high home prices, thin inventories of homes for sale and a pace of sales last seen in 2006; 99 of 100 markets posted year over year increases in value, with 27 metros sporting double-digit annual gains as high as 19.41%

These gains enabled five metro areas to reach or surpass values last seen during boom-era peaks some 13 or 14 years ago. These are:

  • Camden (NJ)
  • Chicago-Naperville-Evanston (IL)
  • Fresno (CA)
  • Hartford-East Hartford-Middletown (CT)
  • Las Vegas-Henderson-Paradise (NV)

Despite years of economic expansion and improving real estate markets, 7 of the nation’s most populated metro areas have 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 housing market values.

Areas with greatest pricing recovery Percent value now above “boom era” price peak
1. Denver-Aurora-Lakewood, CO 115.38%
2. Austin-Round Rock-Georgetown, TX 111.22%
3. Dallas-Plano-Irving, TX 89.75%


Areas with largest recovery gaps Percent increase needed to regain price peak
1. Bakersfield, CA 8.24%
2. Cape Coral-Fort Myers, FL 3.80%
3. Bridgeport-Stamford-Norwalk, CT 2.34%

It is important to note that many markets have seen significant price recoveries since hitting their bottom values, but that many still have not fully recovered the lost value. In fact, there are still three metro areas where this is the case, despite a doubling or more of ‘bust-era’ bottom home values. Two of those are in the group with the largest value gap yet to close.

Areas nearing recovery Percent increase needed to regain price peak
1. Elgin, IL 0.53%
2. Lake County-Kenosha County, IL-WI (MSAD) 1.64%
3. Stockton, CA 1.66%

Important takeaways

  • Record low mortgage rates have stoked gains in home values. 80 markets now have values that are more than 10% above their previous peak values, an increase of 16 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 market with the widest chasm, but even then has closed the gap from a 21.13% deficit a year ago to today's 8.24% level, so full recovery may only be a few more quarters away.

  • There were no new entrants into the most-recovered group. The first four positions remained unchanged, but there was a shuffling of ranke for 6-10, as the Boise, ID metro continued to storm higher and is now in the #5 slot and may be poised to move into the top four before long. It's also possible that in the next quarter or two we will have a new leader, as the Austin-Round Rock-Georgetown, TX metro saw a leap in value in the fourth quarter, closing the gap on Denver-Aurora-Lakewood CO to just a little over four percentage points. To join the "most recovered" group, a metro now must have a value more than 71% above its previous "boom-era" peak value to make the cut.

  • The markets with the largest gaps to fill didn't change, but positions were shuffled. Only seven markets remain in the non-recovered group, and given strong price gains even in these most challenged markets (ranging from about 6% to 12% over the last year) several more are poised to hit recovery very soon.

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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