National Home Price Index: How Did the Predictions Hold Up From One Year to the Next?

A classic Tudor style house in the mid-west of United States for sale with sale sign on lawn.
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In 2020, the COVID-19 pandemic sent the real estate market into a frenzy that’s still going strong today. If you’re searching for a new home or planning to put yours on the market, you’ve probably been keeping a close watch on market conditions to see if this pace will hold steady.

Read More: As Home Prices Reach 34-Year Record, Mortgage Rates Could Be Final Nail in Coffin for Some Homebuyers
Find Out: Mortgage Rates May Rise in 2022, Should You Buy Now or Wait?

For more background information, you might also be interested in data included in the national home price index from December 2020 to December 2021. Here’s a look at how the predictions compared with reality. 

Average Home Prices Continued To Rise

Nationwide home prices — including distressed sales — increased 18.5% year-over-year for December 2021 and 1.3% month-over-month from November 2021. For the year as a whole, this number started at 10% in the first quarter of 2021 and ended at 18% for the fourth quarter.

Despite this, all home types didn’t experience the same level of demand. In December 2021, demand for detached properties — 19.7% — was 5.5% higher than attached properties — 14.2%. 

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The HPI (home price index) growth gap between these widened after the pandemic began, as remote work allowed employees to buy homes in areas where property prices and population density are lower and detached housing is more common. This gap has narrowed since spring 2021 and was the smallest in December.

Find: 25% of Hopeful First-Time Homebuyers Didn’t Get a Home in 2021 — Use These Tactics for Better Luck in 2022

Price Increases Varied by Market

Geographic location played a huge role in the level of appreciation throughout the U.S. In December 2021, prices saw the strongest growth in Arizona (28.4%), Florida (27.1%) and Utah (25.2%).

For the 12-month period as a whole — December 2020 to December 2021 — Florida had the biggest home price growth acceleration, rising from 8.4% to 27.1%. As for the Sunshine State cities with the most appreciation, Naples had the highest year-over-year home price increase at 37.6%, followed by Punta Gorda at 35.7%.

Here’s a look at the 2021 home price predictions vs. reality for 10 major U.S. markets.

Boston

  • Actual 2021 year-over-year percent change: 9.80%
  • Forecasted 2021 year-over-year percent change: 3.20%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 6.60%
  • Percent difference between 2021 forecast and actual 2021 HPI: 206.25%
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Chicago

  • Actual 2021 year-over-year percent change: 8.40%
  • Forecasted 2021 year-over-year percent change: 4.90%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 3.50%
  • Percent difference between 2021 forecast and actual 2021 HPI: 71.43%

Denver

  • Actual 2021 year-over-year percent change: 18.60%
  • Forecasted 2021 year-over-year percent change: 2.40%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 16.20%
  • Percent difference between 2021 forecast and actual 2021 HPI: 675%

Houston

  • Actual 2021 year-over-year percent change: 14.80%
  • Forecasted 2021 year-over-year percent change: -0.30%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 15.10%
  • Percent difference between 2021 forecast and actual 2021 HPI: 5,033.33%

Las Vegas

  • Actual 2021 year-over-year percent change: 24.40%
  • Forecasted 2021 year-over-year percent change: 4.70%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 19.70%
  • Percent difference between 2021 forecast and actual 2021 HPI: 419.15%

Los Angeles

  • Actual 2021 year-over-year percent change: 24.40%
  • Forecasted 2021 year-over-year percent change: 4.70%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 19.70%
  • Percent difference between 2021 forecast and actual 2021 HPI: 419.15%

Miami

  • Actual 2021 year-over-year percent change: 18.80%
  • Forecasted 2021 year-over-year percent change: 7.60%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 11.20%
  • Percent difference between 2021 forecast and actual 2021 HPI: 147.37%

Phoenix

  • Actual 2021 year-over-year percent change: 30.20%
  • Forecasted 2021 year-over-year percent change: 1.60%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 28.60%
  • Percent difference between 2021 forecast and actual 2021 HPI: 1,787.50%

San Diego

  • Actual 2021 year-over-year percent change: 22.40%
  • Forecasted 2021 year-over-year percent change: 10%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 12.40%
  • Percent difference between 2021 forecast and actual 2021 HPI: 124%

Washington, D.C.

  • Actual 2021 year-over-year percent change: 9.90%
  • Forecasted 2021 year-over-year percent change: 3.60%
  • Numerical difference between 2021 forecast and actual 2021 HPI: 6.30%
  • Percent difference between 2021 forecast and actual 2021 HPI: 175%

Clearly, actual sale prices far exceeded 2021 predictions in the markets highlighted above. This is likely due to both a lack of inventory — a decline of 26.8% over the last year, as of December 2021, according to Realtor.com — and record-low interest rates.

However, in the U.S. as a whole, sale prices started to slow down in the fourth quarter of 2021, according to Realtor.com. Specifically, 67% of 183 metro areas analyzed had a double-digit price increase, compared with 78% in the third quarter of the year.

Furthermore, the median sale price of a single-family existing home slowed to an increase of 14.6% — $361,700 — in the fourth quarter of 2021, down from 15.9% in the previous quarter, according to Realtor.com.

Keep Reading: Expert Tips To Smoothly Sell Your Home While Purchasing Your Next One

What Will the 2022 Housing Market Bring?

If you’re looking to purchase a new home this year, you’ll be pleased to know the CoreLogic HPI Forecast predicts the national 12-month growth will steadily slow over 2022. During the early months of the year, it’s projected to remain above 10%, decelerating each month to a 12-month increase of 3.5% by December — serving as a 9.6% average for the full year.

As for available houses, the national inventory of active listings declined even more, tumbling 28.4% over the last year — as of January 2022 — according to Realtor.com. Looking back a bit further, the inventory of active listings is down 60.4%, compared with 2020, before the start of the pandemic.

Only time will tell how the 2022 national home price index compares with predictions, so stay tuned to see if the real estate market performs as expected.

More From GOBankingRates

Methodology: For this piece, GOBankingRates used CoreLogic’s Home Price Index and HPI Forecast to compare their predictions for home price growth versus actual appreciation in select metropolitan areas between December 2020 and December 2021. All data was collected on and up to date as of February 15, 2022.

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