The Case-Shiller Home Price Index, widely regarded as the benchmark for measuring appreciation in home values, revealed a 0.4% increase in home prices nationwide from October to November after seasonal adjustments. This marks a new peak, surpassing the previous month’s record. Year-over-year, home values in November were up by 3.8%, building on October’s 3.6% rise. In particular, the 10-city composite index recorded a 4.9% year-over-year increase, while the 20-city index saw a 4.3% uptick, indicating that major urban areas are growing even faster than the overall national trend. Similarly, the Federal Housing Finance Agency’s (FHFA) House Price Index reported a seasonally adjusted increase of 0.3% from October to November, with prices 4.2% higher compared to the same period last year. It’s important to note that FHFA’s Index differs from Case-Shiller’s as it excludes cash buyers and jumbo loans, focusing only on conforming mortgage financing.
What’s the bottom line?
Homeownership remains a robust opportunity for wealth creation. For example, if you purchase a home for $600,000 and it appreciates by 4% within a year, you could see a gain of $24,000, reflecting a solid investment return.