New homes and existing homes are appreciating at similar rates, according to a new report from CoreLogic. Looking at data from the past decade, CoreLogic’s detailed picture of home appreciation looks beyond simple medians, using the Case-Shiller index for existing home sales and the hedonic index for new home sales.
The Case-Shiller index derives value based on the difference in an existing home’s repeat sale prices, while the hedonic index takes the specific characteristics of a new home, including location, into account. The CoreLogic study offers a comparison for 10-year price appreciation, year-over-year price appreciation and two-year price appreciation.
And, overall, it appears that new homes and existing homes are appreciating at similar rates. “Different pockets of the housing market behave differently,” writes the economist Thomas Malone. “New home prices have risen in the last year, though not quite to the same extent as existing homes and had a boom at the start of the 2010s that was not seen in the existing home market.”
U.S. home price appreciation in new homes and resales
This picture of price appreciation stretching back one decade utilizes CoreLogic’s public records data from 2011 to 2021. During that time frame, new homes appreciated more than existing homes and are now 127% more expensive than in 2011. Existing homes are 93% more expensive. However, there are still other ways to interpret the data.
Year-over-year home price appreciation in new homes and resales
When the data is considered year-over-year, both existing homes and new homes show similar appreciation. However, existing homes experienced a later peak, in July 2021, compared to the May 2021 peak for new homes.
Two-year home price appreciation in new homes and resales
The current two-year appreciation for homes, at this point, does not include the usually flat circumstances of spring 2020. As such, it’s an interesting time to consider those values. And according to CoreLogic, they are similar for both new and existing homes: 25% and 27%, respectively — high appreciation, certainly, though not the peak that occurred in January 2014.