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After the collapse of the housing market in the US, the real estate industry has improved considerably.

One of the key indicators of this is the rate of home appreciation the US is enjoying. Home appreciation occurs when a property’s value rises because of increasing demand in the market, inflation, or improvements done to the property.

Home appreciation rates have always been volatile. Prior to the housing boom it averaged 5 percent per year. During the height of the housing market sometime in 2005, it even reached 10 percent. Now, after the housing crash of 2008, it took until 2012 for the home appreciation rates to turn positive. It now averages once more at 5 percent per year nationally.

The home appreciation rate in the US

For the first quarter of 2016, home prices in the US rose by 1.3 percent. This marks as the 19th consecutive quarterly price increase. This is a marked increase of 5.7 percent from the first quarter of 2015 to the first quarter of 2016.

Here are some of the most significant findings according to the news release by the Federal Housing Finance Agency:

  • House prices saw an increase in every state from 2015 to the first quarter of 2016.
  • The top 5 states with the fastest annual appreciation rate are Oregon (11.8%), Florida (11.2%), Washington (10.9%), Nevada (9.4%), and Colorado (9%).
  • Home appreciation rates were greatest in the most populated metropolitan areas.
  • The Pacific census division saw the greatest increase at 1.9 percent quarterly increase and an 8.1 percent increase as of the 1stquarter of last year.

And the housing appreciation rate is most likely doing better than your own rate of pay increases.

The pay increase rate in the US

Even with the robust economy and improving job market, American workers have yet to enjoy such improvements in terms of wages. In a recent study 2015/2016 US Compensation Planning Survey by Mercer, American workers can only expect a 2.9 percent increase for 2016.

This is backed up by the Korn Ferry Hay Group’s Salary Forecast. The study places the US wage growth at just 2.7 percent. It is considerably outstripped by Lebanon with 11.5 percent, China at 6.3 percent and India at 4.7 percent. This is even with the historically low inflation rates that are enjoyed globally.

However, American workers can turn the rising home appreciation rate to their benefit.

How to make the most of the US rising home appreciation rate

Pay increase may be slow but homeowners can ride the rising home appreciation to compensate. There are many factors that affect home appreciation and with them are ways how to maximize home appreciation:

  • Location

This affects the home in a big way. Homes that are conveniently located close to schools, shopping centers, and open spaces will appreciate faster.

  • Home improvements

Choose home improvement projects that are cost effective. A project like a steel front door replacement is worth every penny. Avoid massive renovation projects such as kitchen renovations or bathroom upgrades. These projects tend to have low return of investments.

  • Home repairs

Minimize home depreciation by doing the necessary repairs. Avoid short term trends and complete repairs that improve the home’s long term value.

These are just some of the best things to do that do not impact your wallet too heavily. Even with the slow increase in pay rates nationally, your home can be an asset you can rely on in the long term.


Would you like some pointers on things you can do to your home to increase its value? Contact me or call/text me at 760 622 5087 for an appointment to view the home and give you personalized advice on what to do.