Last month it looked like a slight market easing was underway as, for six straight weeks in the DC metropolitan area, more homes came on the market than went under contract. In fact, the median sold price for residential properties in the area was $575,250 in July, a decrease of 4.1% compared to June (although still an increase of 4.6% from July 2020.) Now, surges in Covid-19 infections have introduced greater uncertainty into the financial markets and the result is that mortgage rates have dipped again – furthering strengthening housing demand and apparently overcoming any price softening that greater inventory might have encouraged. This means that in 2021, home prices are rising at the highest rate in history, outpacing even the housing bubble preceding the Great Recession. Consistent with strong demand and limited supply, home price appreciation may rise as high as 13.5% by mid-2021 with home value growth predictions for the year as a whole ranging from about 9% to almost 15%.

Compared to the normal pace of 3-5% appreciation per year, the current average forecast of nearly 11.5% is significant. For homeowners, that price appreciation helps give your equity a boost and by refinancing your mortgage or taking a home equity loan, it can be put toward life-changing goals like funding an education or opening a business. But don’t wait: while price appreciation is strong now, we’ll likely see a more normalized pace next year.