Read an Excerpt
As investments go, your house still probably doesn't measure up to your mutual fund.
But home values around the nation, after years of marginal growth,are finally on the rise. The U.S. Office of Housing Enterprise Oversight, which monitors government-sponsored mortgage buyers Fannie Mae and Freddie Mac, said the median price for existing homes rose 3.6% in 1996 nationwide--the second year in a row home appreciation grew faster than the consumer price index, and only the second time since 1989. Meanwhile, the National Association of Home Builders says new home prices in 1996 rose 4.6%, the largest increase in seven years.
Moribund markets like Boston and Washington, D.C., have seen price increases. Even in California, where the value of existing homes has fallen almost 10% since 1992, there's a glimmer of a resurgence. Richard P. Nesbitt, branch manager of a Coldwell Banker Residential Real Estate office in San Diego, predicts homes in his market will appreciate 3% to 5% after six years of flat or falling prices. Home prices "are coming back. It's exciting," he says....
In any case, few predict that homes will appreciate the way they did in the 1970s and 1980s. "It's steady, without big peaks and valleys," says Edward W. Marrs, executive director of the National Home Buying Institute, a consumer group. "It's good for the consumer and good for the industry."