Home Value Calculator (US)
The home value calculator is a handy device that finds your homes value on a given date using the Case-Shiller Index. You can use this home value estimator if you know either the property's purchase price or its assessed value from another date. Therefore, if you've ever asked yourself the question, "What is the value of my home?", this home value estimator is the right place for you to find out the answer.
If you are considering taking out a loan to to purchase a house, you may find our mortgage calculator helpful in the decision making. The home improvement loan calculator is a good tool to evaluate your repayment schedule if you're taking out a loan to rehabilitate a property.
What is the value of my home?
Since there are many factors that influence the price of your home, estimating home value is always challenging. The most determinative factor is probably the state of the economy (demand-side), but, for example, the available housing supply also strongly affects house prices. The following list includes the most relevant factors:
- Economic growth: The available income in the economy determines the demand for housing. When an economy is booming, incomes rise, and people can afford better homes. The more buyers there are in the market, the more prices are pushed up.
- Unemployment rate: The more jobless people there are, the fewer buyers there are on the housing market;
- Interest rate: Interest rates on mortgages affect the cost of borrowing by altering the monthly mortgage payments;
- Mortgage availability: The main driving factor of the U.S.A.'s 2000s housing boom was financial innovations in the mortgage market accompanied by loose lending conditions and government policies to promote home-ownership. As a result, many banks were very keen to lend mortgages, including to people with bad credit history, which pushed up the demand, and thus prices;
- Housing supply: A shortage of housing supply increases prices. Excess supply causes prices to fall;
- Home affordability/house prices to earnings: The ratio of house prices to earnings influences the demand: when house prices rise relative to income, there are fewer people able to afford them; and
- Geographical factors: Probably the least surprising factor: the price of your home strongly depends on its location. The same house in a different region or city could significantly affect its value.
So, what is a value of my home? You can follow the article to the next section where we explain one of the method of evaluating home prices, or simply use the home value calculator.
How to find home value? Case-Shiller Index
A possible way of overcoming the difficulties caused by the complexity of the housing market is to use a well-established house price index. In the present home value calculator, we use the, a repeat-sales house price index for the United States.
The repeat-sales approach refers to the house valuation method that monitors the sale prices of the same real estate piece over time. The Case–Shiller index, which is calculated individually in twenty distinct metro areas, uses monthly data points from 1987 through to the present. This makes it possible to estimate your home's value at a desired date with just a past purchase price or a past valuation.
How to use the home value calculator?
Now that you know how to find home value with the Case-Shiller Index, let's take a look at the home value calculator which effectively uses this index:
Select your metro area and give your home's purchase price or an estimated past value.
Set the year and the month of the purchase or past evaluation.
Set the year and the month of the desired date you want to check your home's value for.
After setting these parameters, you will receive the following estimations:
The nominal home value, which is not adjusted by inflation. This is the estimated price you might expect if you would sell the house on the given date.
The real home value, which is the inflation-adjusted value of the house. This tells you the price of the house with the dollar's buying power from the reference date (date of purchase or past evaluation).
The increase/decrease in the nominal value compared to the reference date.
The increase/decrease in the real value compared to the reference date.
The results of this calculator, due to some degree of generalization inherent in the employed method, should be considered as just an rough approximation financially. For this reason, and also because of possible shortcomings, the calculator is created for instructional purposes only.