Key information about House Prices Growth

• US house prices grew 5.2% YoY in Sep 2024, following an increase of 6.2% YoY in the previous quarter.
• YoY growth data is updated quarterly, available from Mar 1992 to Sep 2024, with an average growth rate of 5.5%.
• House price data reached an all-time high of 17.7% in Sep 2021 and a record low of -12.4% in Dec 2008.

House price growth slowed down in many countries worldwide in 2022 compared to the year before. Conversely, in Turkey, Vietnam, Russia, Sri Lanka, Georgia, and Mexico, house prices continued to grow. Adjusted for inflation, the annual house price increase in Turkey measured a staggering 63 percent. In the United States, on the other hand, price growth felt from 10.5 percent to 1.2 percent. In 2022, mortgage interest rates, increased overall in response to rising inflation and economic instability.

Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q4 2024 about sales, median, housing, and USA.

House prices grew year-on-year in most states in the U.S. in the third quarter of 2024. The District of Columbia was the only exception, with a decline of three percent. The annual appreciation for single-family housing in the U.S. was 0.71 percent, while in Hawaii—the state where homes appreciated the most—the increase exceeded 10 percent. How have home prices developed in recent years? House price growth in the U.S. has been going strong for years. In 2024, the median sales price of a single-family home exceeded 413,000 U.S. dollars, up from 277,000 U.S. dollars five years ago. One of the factors driving house prices was the cost of credit. The record-low federal funds effective rate allowed mortgage lenders to set mortgage interest rates as low as 2.3 percent. With interest rates on the rise, home buying has also slowed, causing fluctuations in house prices. Why are house prices growing? Many markets in the U.S. are overheated because supply has not been able to keep up with demand. How many homes enter the housing market depends on the construction output, whereas the availability of existing homes for purchase depends on many other factors, such as the willingness of owners to sell. Furthermore, growing investor appetite in the housing sector means that prospective homebuyers have some extra competition to worry about. In certain metros, for example, the share of homes bought by investors exceeded 20 percent in 2024.

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Residential Real Estate Market Size 2024-2028

The residential real estate market size is forecast to increase by USD 482.1 billion at a CAGR of 4.6% between 2023 and 2028.

The market is experiencing significant growth, driven by increasing demand from a growing population and urbanization trends. This demand is further fueled by marketing initiatives from real estate developers and agents, who are leveraging digital platforms and creative campaigns to attract buyers. However, regulatory uncertainty poses a challenge to market growth, with varying regulations and policies in different regions impacting investment decisions. For companies seeking to capitalize on market opportunities, it is essential to stay informed of regulatory changes and adapt strategies accordingly. Additionally, collaboration with local experts and partnerships with regulatory bodies can help navigate complex regulatory landscapes and ensure compliance. Overall, the market presents significant opportunities for growth, but requires a strategic approach to address regulatory challenges and effectively target demand. Companies that can navigate these challenges and adapt to local market conditions will be well-positioned to succeed in this dynamic market.

What will be the Size of the Residential Real Estate Market during the forecast period?

Request Free SampleThe market continues to exhibit activity, driven by strong economic fundamentals and population growth. In nominal terms, the market size reached an all-time high in the latest fiscal year, with discerning buyers demonstrating continued interest in spacious accommodations. However, macroeconomic headwinds, such as rising interest rates and inflation, pose challenges for some potential homebuyers. Economic factors, including GDP per capita and purchasing power, remain essential support for the housing market. Despite these conditions, property launches in the luxury residential sector have shown resilience, catering to the demand for high-end living spaces. Residential construction remains a critical component of the market, with new housing units being added to meet the growing demand for homes. Overall, the market is expected to remain a significant contributor to the economy, offering opportunities for both investors and homebuyers.

How is this Residential Real Estate Industry segmented?

The residential real estate industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments. Mode Of BookingSalesRental/LeaseTypeApartments and condominiumsLanded houses and villasGeographyAPACChinaJapanNorth AmericaUSEuropeGermanyUKSouth AmericaMiddle East and Africa

By Mode Of Booking Insights

The sales segment is estimated to witness significant growth during the forecast period.

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The Sales segment was valued at USD 896.60 billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

APAC is estimated to contribute 54% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market in the Asia Pacific (APAC) region held the largest market share in 2023 and is anticipated to continue leading the market growth during the forecast period. Key drivers of this expansion include population growth and increasing purchasing power, leading to a in demand for spacious accommodations. Rapid urbanization and economic fundamentals, such as GDP per capita, have fueled the construction of new housing units, particularly in countries like India and China. Furthermore, domestic demand and foreign homebuyers have contributed to the unsold inventory overhang, creating investment opportunities in underconstruction properties. Despite these positive indicators, challenges persist, including affordability concerns and critical input costs. In the context of the US housing market, the residential real estate sector offers investment opportunities through traditional options, such as home ownership and rental cash flow, as well as low-risk methods, like investment portfolios. Key economic factors, such as interest rates and supply metrics, impact residential property prices, which may vary in real and nominal terms. The market is also influenced by changing consumer preferences, regulatory reforms, and technological transformation, including home automation and cutting-edge strategies.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holi

In the first quarter of 2024, the United Arab Emirates, Poland, and Bulgaria registered the highest house price increase in real terms (adjusted for inflation). In the United Arab Emirates, house prices outgrew inflation by 16.17 percent. When comparing the nominal price change, which does not take inflation into consideration, the average house price growth was even higher. Nevertheless, many countries experienced declining prices, with Luxembourg recording the biggest decline, at nearly 14 percent. That has to do with a broader trend of a slowing global housing market.

Portugal, Canada, and the United States were the countries with the highest house price to income ratio in 2023. In all three countries, the index exceeded 130 index points, while the average for all OECD countries stood at 117.5 index points. The index measures the development of housing affordability and is calculated by dividing nominal house price by nominal disposable income per head, with 2015 set as a base year when the index amounted to 100. An index value of 120, for example, would mean that house price growth has outpaced income growth by 20 percent since 2015. How have house prices worldwide changed since the COVID-19 pandemic? House prices started to rise gradually after the global financial crisis (2007–2008), but this trend accelerated with the pandemic. The countries with advanced economies, which usually have mature housing markets, experienced stronger growth than countries with emerging economies. Real house price growth (accounting for inflation) peaked in 2022 and has since lost some of the gain. Although, many countries experienced a decline in house prices, the global house price index shows that property prices in 2023 were still substantially higher than before COVID-19. Renting vs. buying In the past, house prices have grown faster than rents. However, the home affordability has been declining notably, with a direct impact on rental prices. As people struggle to buy a property of their own, they often turn to rental accommodation. This has resulted in a growing demand for rental apartments and soaring rental prices.

Graph and download economic data for All-Transactions House Price Index for the United States (USSTHPI) from Q1 1975 to Q4 2024 about appraisers, HPI, housing, price index, indexes, price, and USA.

Graph and download economic data for All-Transactions House Price Index for California (CASTHPI) from Q1 1975 to Q4 2024 about appraisers, CA, HPI, housing, price index, indexes, price, and USA.

Key information about House Prices Growth

• Japan house prices grew 4.3% YoY in Nov 2024, following an increase of 2.0% YoY in the previous month.
• YoY growth data is updated monthly, available from Apr 2009 to Nov 2024, with an average growth rate of 1.9%.
• House price data reached an all-time high of 10.2% in Apr 2022 and a record low of -9.4% in Apr 2009.

Housing Index in Portugal increased to 228.89 points in the third quarter of 2024 from 220.74 points in the second quarter of 2024. This dataset provides - Portugal House Price Index - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Graph and download economic data for All-Transactions House Price Index for West Virginia (WVSTHPI) from Q1 1975 to Q4 2024 about WV, appraisers, HPI, housing, price index, indexes, price, and USA.

Turkey experienced the highest annual change in house prices in 2024, followed by Russia and the United Arab Emirates. In the first quarter of the year, the nominal house price in Turkey grew by 55 percent, while in Russia and the United Arab Emirates, the increase was 19 and 18 percent, respectively. Meanwhile, several markets, including Hong Kong, Luxembourg, and Germany, saw prices fall. That has to do with an overall cooling of the global housing market that started in 2022. When accounting for inflation, house price growth was slower, and even more countries saw the market shrink.

Companies operating in the third-party real estate industry have had to navigate numerous economic headwinds in recent years, ranging from rising interest rates, spiralling inflation and muted economic growth. Revenue is projected to sink at a compound annual rate of 3.7% over the five years through 2024, including an estimated slump of 2.1% in 2024 to €196.2 billion, while the average industry profit margin is forecast to reach 34.6%. Amid spiralling inflation, central banks across Europe ratcheted up interest rates, resulting in borrowing costs skyrocketing in the two years through 2023. In residential markets, elevated mortgage rates combined with tightening credit conditions eventually ate into demand, inciting a drop in house prices. Rental markets performed well when house prices were elevated, being the cheaper alternative for cash-strapped buyers. However, even lessors felt the pinch of rising mortgage rates, forcing them to hoist rent to cover costs and pricing out potential buyers. This led to a slowdown in rental markets in 2023, weighing on revenue growth. Revenue is forecast to swell at a compound annual rate of 4% over the five years through 2029 to €238.7 billion. Following a correction during 2024, housing prices are set to being recovering in 2025 as fixed-rate mortgages begin to drop and economic uncertainty subsides, aiding revenue growth in the short term. Over the coming years, Proptech, which has been heavily invested in, will force estate agents to adapt, shaking up the traditional real estate industry. A notable application of Proptech is the use of AI and data analytics to predict a home’s future value.

The Direct Real Estate Activities industry have come up against numerous headwinds in recent years, ranging from the COVID-19 outbreak in 2020 to the rising base rate environment in the years since, which have inflated borrowing costs for potential buyers. This is a sharp contrast to the ultra-low interest environment seen over the decade following the 2008 financial crisis. Revenue is forecast to fall at a compound annual rate of 4.0% over the five years through 2024 to €588.2 billion, including an anticipated drop of 3.1% in 2024. However, profitability remains strong, with the average industry profit margin standing at an estimated 41.6% in 2024. Central banks across Europe adopted aggressive monetary policy in the two years through 2023 in an effort to curb spiralling inflation. This ratcheted up borrowing costs and hit the real estate sector. In the residential property market, mortgage rates picked up and hit housing transaction levels. However, the level of mortgage rate hikes has varied across Europe, with the UK experiencing the largest hike, meaning the dent to UK real estate demand was more pronounced. Commercial real estate has also struggled due to inflationary pressures, supply chain disruptions and rising rates. Alongside this, the market’s stock of office space isn’t able to satisfy business demand, with companies placing a greater emphasis on high-quality space and environmental impact – properties in many areas aren’t suitable due to their lack of green credentials. Revenue is slated to inch upwards at a compound annual rate of 3.1% over the five years through 2029 to €651.3 billion. Although economic conditions are set to improve in the short term, elevated mortgage rates will continue to weigh on demand for residential property. However, the warehousing market is positioned for solid growth, benefitting from the rise in e-commerce. This is particularly relevant to Poland, which leads the EU warehouse market.

House prices in Spain have risen year-on-year since 2014. The house price index measures the development of house prices, with 2015 chosen as a base year when the index value was 100. Between 2021 and 2023, the house price index in Spain rose by eight percent for new housing and 3.2 percent for existing housing. Overall, newly built housing has appreciated more than existing homes.

VITAL SIGNS INDICATOR Home Prices (EC7)

FULL MEASURE NAME Home Prices

LAST UPDATED August 2019

DESCRIPTION Home prices refer to the cost of purchasing one’s own house or condominium. While a significant share of residents may choose to rent, home prices represent a primary driver of housing affordability in a given region, county or city.

DATA SOURCE Zillow Median Sale Price (1997-2018) http://www.zillow.com/research/data/

Bureau of Labor Statistics: Consumer Price Index All Urban Consumers Data Table (1997-2018; specific to each metro area) http://data.bls.gov

CONTACT INFORMATION vitalsigns.info@bayareametro.gov

METHODOLOGY NOTES (across all datasets for this indicator) Median housing price estimates for the region, counties, cities, and zip code come from analysis of individual home sales by Zillow. The median sale price is the price separating the higher half of the sales from the lower half. In other words, 50 percent of home sales are below or above the median value. Zillow defines all homes as single-family residential, condominium, and co-operative homes with a county record. Single-family residences are detached, which means the home is an individual structure with its own lot. Condominiums are units that you own in a multi-unit complex, such as an apartment building. Co-operative homes are slightly different from condominiums where the homeowners own shares in the corporation that owns the building, not the actual units themselves.

For metropolitan area comparison values, the Bay Area metro area’s median home sale price is the population-weighted average of the nine counties’ median home prices. Home sales prices are not reliably available for Houston, because Texas is a non-disclosure state. For more information on non-disclosure states, see: http://www.zillow.com/blog/chronicles-of-data-collection-ii-non-disclosure-states-3783/

Inflation-adjusted data are presented to illustrate how home prices have grown relative to overall price increases; that said, the use of the Consumer Price Index does create some challenges given the fact that housing represents a major chunk of consumer goods bundle used to calculate CPI. This reflects a methodological tradeoff between precision and accuracy and is a common concern when working with any commodity that is a major component of CPI itself.

Mexico's housing market demonstrates significant regional price variations, with Mexico City emerging as the most expensive area for residential property in 2024. The capital city's average house price of 3.91 million Mexican pesos far exceeds the national average of 1.73 million pesos, highlighting the stark contrast in property values across the country. This disparity reflects broader economic and demographic trends shaping Mexico's real estate landscape. Sustained growth in housing prices The Mexican housing market has experienced substantial growth over the past decade, with home prices more than doubling since 2010. By the third quarter of 2023, the nominal house price index reached 255.54 points, representing a 146 percent increase from the baseline year. Even when adjusted for inflation, the real house price index showed a notable 40 percent growth, underscoring the market's resilience and attractiveness to investors. The mortgage market is dominated by three main player types: Infonavit, Fovissste, and commercial banks including Sofomes. In 2023, Infonavit, a scheme by Mexico's National Housing Fund Institute which provides lending to workers in the formal sector, was responsible for the majority of mortgages granted to individuals. Challenges in mortgage lending Despite the overall growth in housing prices, Mexico's mortgage market has faced challenges in recent years. The number of new mortgage loans granted has declined over the past decade, falling by approximately 200,000 loans between 2008 and 2023. This decrease in lending activity may be attributed to various factors, including economic uncertainties and changing consumer preferences. The state of Mexico, which is home to 13 percent of the country's population, likely plays a significant role in shaping these trends, given its large demographic influence on the national housing market.

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US Residential Construction Market Size 2025-2029

The residential construction market size in the US is forecast to increase by USD 242.9 million at a CAGR of 4.5% between 2024 and 2029.

The residential construction market is experiencing significant growth, driven by several key factors. Firstly, the increasing household formation rates in the US continue to fuel demand for new housing units. Secondly, there is a rising focus on sustainability in residential construction projects, with homebuilders increasingly adopting energy-efficient and eco-friendly building materials and practices.
However, the market also faces challenges, including a shortage of skilled labor for large-scale residential real estate projects, which can impact project timelines and budgets. These trends and challenges are shaping the future of the residential construction industry in the US.

What will be the US Residential Construction Market Size During the Forecast Period?

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The residential construction market is experiencing a significant shift as the affordable housing trend gains momentum. The Federal Reserve's decision to keep the federal funds rate low has contributed to a decrease in mortgage rates, making it an opportune time for home buyers to enter the market. However, the housing supply remains a concern, with construction spending in the residential investment sector showing only modest growth. The labor market's current state is another factor influencing the residential construction industry. With a low unemployment rate, there is a high demand for labor, leading to increased wages and, in turn, higher construction costs.
Inflation also poses a challenge, as it erodes the purchasing power of home buyers and builders alike. The economy's overall health plays a crucial role in the residential construction market's dynamics. A strong economy typically leads to increased demand for new homes, as evidenced by the double-digit growth in housing starts and building permits for single-family homes. However, a recession can lead to a significant decrease in construction activity, as seen in the cancellation rate of housing projects. The Federal Reserve's interest rate decisions, inflation, and the economy's health all impact the residential construction market. Affordable housing programs, such as housing choice vouchers and fair housing programs, play a vital role in ensuring access to housing for a broader population. The construction sectors must navigate these market dynamics to remain competitive and meet the demand for new homes.
The US residential construction market is seeing significant shifts, driven by various housing market trends. Sustainable homebuilding practices are gaining momentum, with a focus on energy-efficient homes and green building materials. Modular construction and prefab housing are becoming increasingly popular for their cost-effective and timely solutions. Urban redevelopment projects are revitalizing city areas, while suburban expansion is fueling demand for new homes. Affordable housing projects are crucial in addressing housing shortages, and real estate investment continues to thrive in these sectors. Smart home integration is also on the rise, with luxury home construction embracing high-tech features. The impact of mortgage rates, coupled with multifamily housing growth and home renovation demand, adds complexity to the market's dynamics.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Product

  Apartments and condominiums
  Villas
  Other types


Type

  New construction
  Renovation


Application

  Single family
  Multi-family


Geography

  US

By Product Insights

The apartments and condominiums segment is estimated to witness significant growth during the forecast period.

The residential construction market in the US is experiencing growth in the apartment and condominium sectors, driven by shifting preferences and lifestyle choices. Urbanization is a significant factor fueling this trend, as more individuals opt for the conveniences and amenities offered in urban areas. As a result, developers are constructing modern, sustainable, and community-focused living spaces in the form of high-rise apartment buildings and condominium complexes. These structures cater to various demographics, including intergenerational groups and younger generations, reflecting diverse living circumstances. The labor economy and vaccination rates have also contributed to the continued activity in the residential sector, allowing for steady progress in construction projects. While the non-residential sector has faced challenges, the residential sector remains a vi

Graph and download economic data for Zillow Home Value Index (ZHVI) for All Homes Including Single-Family Residences, Condos, and CO-OPs in the United States of America (USAUCSFRCONDOSMSAMID) from Jan 2000 to Jan 2025 about 1-unit structures, family, residential, housing, indexes, and USA.