FNC: Larger Homes Appreciating Faster Than Smaller Ones

Home price appreciation generally tends to be higher for larger homes, a new report from mortgage technology company FNC shows.

The firm's new Examining Residential Home Sales report provides a detailed look into the characteristics of existing single-family homes that have been bought and sold in the marketplace during the past 10 years. Compiled from FNC's National Collateral Database, it tracks and analyzes property transactions and appraisal information, including the characteristics of residential home sales such as property age, living area size, ownership duration, loan origination vintage, and home foreclosures.

‘Information contained in the report can provide insight about the latest market conditions and about any long-term structural changes that may be developing in the single-family property market,’ says Robert Dorsey, co-founder and chief of data and analytics for FNC. ‘For instance, a profile of long-term trends in how different types of properties have appreciated over the years shows that larger homes have generally risen in value faster than smaller homes both before and after the last boom-bust housing cycle. The gap persisted, although narrowed quite a bit, during the worst of the housing recession.’

Dorsey adds that such information ‘is valuable but often hard to quantify because detailed property information can be difficult to find.’Â Â

According to the report, median normal-sale homes in October saw a 2.4% annualized rate of appreciation upon resale. When broken down by the timing of a resale home's prior purchase, homeowners and investors who entered the market in 2010 or later have captured an average return of 14.3%.Â

‘As the market continues to gain traction through the post-recession recovery, we are seeing significant declines in the turnovers of homes held for short periods,’ says Yanling Mayer, director of research for FNC. ‘Year to date, nearly one in three residential home sales have come instead from homes that have been held for at least a decade or longer – signs of increased participation by trade-up buyers.’

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