Around 20%. That's about how much the average home's value has gone up each of the last two years.
“We've seen just a lot of people just and a lot of demand, and that’s what is pushing up prices. There’s just not enough homes to satisfy all those people,” said Nicole Bachaud, an economist with Zillow.
She says four main factors have been causing home prices to explode.
“Builders stopped building homes, millennials, which are the largest generation in the history of this country, are starting to age into their prime home-buying years, Baby Boomers, are starting to downsize and retire add on top of that low mortgage rates that have stimulated people to enter the market," said Bachaud.
The resulting rising prices have led to increased wealth for people who own homes. However, some are worried that wealth isn’t being shared equally.
“We’re not seeing equal gains across the board when folks are selling homes and accumulating wealth from that or when their homes are valued,” said Jennifer Greenfield, a professor at the College of Social Work at the University of Denver.
She says there are still significant factors that can impact the value of a Black person’s home.
“Homes in Black neighborhoods are valued significantly lower than homes in white neighborhoods appraisals historically, and in recent years we’ve seen come in lower even in the same neighborhood, even the same home is appraised lower when it is perceived being owned by a Black family versus a white family,” said Greenfield.
Home equity is the most significant contributor to the nearly $2 trillion wealth gap between white and Black Americans.
Greenfield says solutions to this problem are almost as complicated as the problem itself, but there is one thing she thinks could make a big difference quickly.
“One of the things that need to happen is there needs to be significant investment in helping Black families, and low-income families in general, to be able to afford down payments on these purchases,” said Greenfield.
She says she’d also like to see an overhaul of the mortgage lending and appraisal process and other ideas that would help make housing fairer and help Black families catch up in building wealth.