Homeownership is an important source of wealth creation, enabling current homeowners and succeeding generations to move up the economic ladder. House prices can move up and down over time due to factors such as the health of the economy, credit availability and regulatory standards, demographic shifts, lifestyle changes, and housing supply. Home prices change over time, but are homeowners more likely to gain or lose home value?

This study analyzes whether homeowners are more likely to experience a home price gain or loss during the period when they hold a home. The study estimates the gain or loss arising from changes in the median home prices of single-family homes since 1989 until 2019 over a tenure or holding period of seven, eight, nine, or 10 years in the United States, the four regions, and 177 metro areas (except when the metro areas were forme after 1989).

The study shows that, on average, single-family home prices in the United States increased in value over a tenure period of seven, eight, nine, or 10 years since 1989. The average price appreciation of a single family home ranged from about 29% (seven-year tenure) to 39% (10-year tenure), or average gains of $38,000 to $49,500.

Home prices increased in all four regions, with the highest home price appreciation in the West region where home prices rose 34% (seven-year tenure) to 43% (10-year tenure), or average gains of $57,300 to $72,700.

It is worth noting that even in states like California, Florida, Nevada and New York where prices rose and fell sharply around the period of the Great Recession, the metro areas in these states experienced home price gains on average over a seven to 10-year tenure period.

In terms of the average percent gain over a 10-year period, the metro areas with the largest gains are: Sherman-Denison, TX (111%); Port St; Lucie, FL (86%); Anaheim-Sta. Ana- Irvine, CA (80%); Naples-Immokalee-Marco Island, FL (77%); Miami-Fort Lauderdale-West Palm Beach, FL (75%); Denver-Aurora-Lakewood, CO (73%); Nassau County-Suffolk County, NY (72%); Punta Gorda, FL (71%); and Seattle-Tacoma-Bellevue, WA (71%).

The collapse in housing prices during 2005 through 2012 led to a large loss in home equity for many homeowners, with nearly $6 trillion of home equity wiped out and nearly 10 million in home foreclosures as the median existing-home sales price (single-family) fell by 25% from $221,900 in 2006 to a low of $166,200 in 2011. However, home prices have rebounded since 2011, to $274,500 in 2019, a 65% gain from the 2011 trough and a 24% gain from the 2006 peak.

While there was a negative gain in 13% of all observations (gain or loss for seven, eight, nine, 10 years across all metros across all years), this study shows that homeowners are more likely to reap home equity gains when they hold or stay in their home for seven, eight, nine, or 10 years.

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