Northern VA homes continue to sell quickly with low inventory causing many people to have questions about home prices right now. How much have prices risen over the past year? What’s happening with home values? What’s next year projections? Let’s answers all three of these questions right now.

Northern VA home values appreciated have appreciated how much!?

According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Prices have gone up at an accelerated pace for each of the last eight months (see graph below):

CoreLogic numbers coincides with data from the other two main home price indices: the FHFA Home Price Index and the S&P Case Shiller Index.

The last 12 months has shown tremendous home price appreciation in Northern VA, which is resulting in a major gain in wealth for homeowners through rising equity.

What’s happening with home prices right now?

All this data shows that while appreciation is in the high double digits right now, that price acceleration is beginning to plateau (graph below):

Year-over-year appreciation is still close to 20%, but at a slowing rate. Many experts believe it will drop below 15% by the end of the year.

It is very important to remember, that doesn’t mean Northern VA home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.

What about 2022?

The surge in prices is the result of heavy buyer demand and a shortage of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:

1. Freddie Mac

2. Fannie Mae

3. Mortgage Bankers Association

4. Home Price Expectation Survey

5. Zelman & Associates

6. National Association of Realtors

While the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.

Bottom Line

There have been historic levels of home price appreciation over the last year in Northern VA. That pace will slow as we finish 2021 and enter into 2022. Prices will still rise in value, just at a much more moderate pace, which is good news for the housing market.