Home appreciation: Bigger isn’t always better

When shopping for a new home, bigger is always better, right? Not according to a new study, which shows that smaller homes often offer a greater return on investment than larger properties.

Personal finance website NerdWallet.com analyzed home sales in 20 metro areas nationwide from 2103 to 2016 and found that on average, the smaller the home, the higher the appreciation over that time period. The smallest quartile of homes had the highest average annual home-price increase, at 9.7 percent, from 2013 to 2016. By comparison, appreciation for the largest homes averaged only 4.2 percent.

While the value of the smallest homes increased by the largest percentage, larger homes grew in value by the largest dollar amount. The smallest (and least expensive) homes, on average, grew in value by just under $58,000 between 2013 and 2016, while the largest (and most expensive) homes increased in value by nearly $100,000. In terms of return on investment, however, the small homes are clearly the winners. The report demonstrates the strong demand for starter homes and the most affordable types of properties as well as the limited inventory of these types of properties. High demand and low supply often result in price increases.

Whether you’re purchasing a big home or a small one, you’ll enjoy Primary Residential Mortgage Inc.’s dedication to a providing a five-star lending experience. Led by CEO David Zitting — a veteran loan originator —we are dedicated to making sure each of our borrowers gets a five-star mortgage experience.