Appreciation Rates
NeighborhoodScout's® Exclusive Home Appreciation Rates
NeighborhoodScout reveals the home appreciation rates for every city, town,and even most neighborhoods in America.
NeighborhoodScout has calculated and provides home appreciation rates as apercentage change in the resale value of existing homes in that city, townor neighborhood over the latest quarter, the last year, 2-years, 5-years,10-years, and even from 2000 to present. We show both the cumulativeappreciation rate, and the average annual appreciation rate for each timeperiod (e.g., last 5-years: 84% total appreciation, Avg. per year: 16.8%).We also show how each city, town or neighborhood's appreciation rate comparesto other cities, towns and neighborhoods in the nation, and within the samestate (e.g., 9 relative to the nation, 5 relative to California [10 is highest]).This makes comparisons of house appreciation rates equally easy for professionalinvestors and individual homebuyers. In this example, the neighborhood isone of the highest appreciating in the nation over the last 5-years, but isonly average in appreciation for the same period relative to other neighborhoodsin the state of California.
About the appreciation rate data
Our data are designed to capture changes in the value of single-family homesat the city, town and even the neighborhood level. Different neighborhoodswithin a city or town can have drastically different home appreciation rates.NeighborhoodScout vividly reveals such differences. Our data are built uponmedian house values in each neighborhood, and combine data from the UnitedStates Bureau of the Census with quarterly house resale data. The datareflect appreciation rates for the neighborhood overall, not necessarilyeach individual house in the neighborhood.
Our data are calculated and updated every three months for each neighborhood,city and town, approximately two months after the end of the previous quarter.Each quarter, Fannie Mae and Freddie Mac provide their most recent mortgagetransactions to the FHFA. These data are combined with the data of theprevious 29 years to establish price differentials on properties where morethan one mortgage transaction has occurred. The data are merged withneighborhood-specific median house values from the Census Bureau usingNeighborhoodScout's proprietary algorithms developed by Dr. Schiller,creating an updated historical database that is then used to estimate theappreciation rates for each city, town and neighborhood within each timeperiod. These resultant neighborhood appreciation rates are a broad measureof the movement of single-family house prices. The appreciation rates serveas an accurate indicator of house price trends at the neighborhood level.
How is the home appreciation data calculated?
Neighborhood appreciation rates from NeighborhoodScout are based on bothmedian house value data reported by respondents via the U.S. Bureau of theCensus, and a weighted repeat sales index, meaning that they measure averageprice changes in repeat sales or refinancings on the same properties. Thisinformation is obtained by reviewing repeat mortgage transactions onsingle-family properties whose mortgages have been purchased or securitizedby Fannie Mae or Freddie Mac (by the FHFA). Then proprietary algorithmsdeveloped by Dr. Schiller, NeighborhoodScout's founder, are appliedto produce neighborhood appreciation rates. Appreciation rates are updatedby NeighborhoodScout each quarter as additional mortgages are purchased orsecuritized by Fannie Mae and Freddie Mac. The new mortgage acquisitionsare used to identify repeat transactions for the most recent quarter, thenare fed into NeighborhoodScout's search algorithms.
What transactions are covered in the appreciation rate data?
Neighborhood appreciation rate data are based on transactions involvingconforming, conventional mortgages. Only mortgage transactions on single-familyproperties are included. Conforming refers to a mortgage that both meetsthe underwriting guidelines of Fannie Mae or Freddie Mac and that doesn'texceed the conforming loan limit, a figure linked to an index published bythe Federal Housing Finance Board. Conventional means that the mortgagesare neither insured nor guaranteed by the FHA, VA, or other federal governmententity.
Mortgages on properties financed by government-insured loans, such as FHAor VA mortgages, are excluded, as are properties with mortgages whose principalamount exceeds the conforming loan limit. Mortgage transactions on condominiumsor multi-unit properties are also excluded. As such, NeighborhoodScout doesnot produce appreciation rates for neighborhoods that consist solely ofrenters or have no single-family homes (dwellings without an entrance directlyto the outside).
