Home prices are generally continuing to climb, according to nearly all national datasets and analyses, with no strong indication of an impending dip. But as most real estate professionals know, the devil is often in the details, with local or more specific insights often a better barometer of the market, and more useful in guiding clients and business decisions.
Releasing one of its first in-depth data reports, upstart portal Homes.com found that broad (but slow) price appreciation is skewing across specific property price levels—as well as across the number of bedrooms in a property—with the relative affordability of a home offering a very different path for price appreciation.
“What we found is that the ‘workforce housing’—the more lower-priced housing—has seen more appreciation than any other types of housing,” says Melina Duggal, senior director of market analytics for CoStar (which owns Homes.com).
Looking back across roughly a decade of data, Homes.com saw so-called “workforce housing,” which it defined as the lowest quartile of prices in a given region, outperforming all other price points—up 91% since 2016.
That compares to an average of 71% for all price points, and 67% for “upscale” housing (the top quartile).
Looking at properties through this lens allows Homes.com to better assess trends in national data that are otherwise obscured by vastly different local home prices, according to Duggal, with median prices currently ranging from over $1 million to under $150,000, depending on location.
Workforce housing performed better across almost every type of market, seeing a slightly smaller boost in the Covid boom market (from 8.8% annually from 2016 – 2020 to 13.4% across 2020 – 2022) but still beating out high-priced homes across the last decade.
Duggal says there are a few possible explanations for this, from simple supply and demand to having more “space” to appreciate after the pandemic.
“When I was looking at some of the historical data, we could see that in many markets, the top end of the market increased the most earlier, right after the beginning of the pandemic,” she says, “and so the workforce housing is kind of catching up.”
How this will play out in the 2025 market is unclear, with plenty of uncertainty around rates and other foundational factors. Homes.com tracked a sharp overall dip in the rate of price appreciation, from 5.6% in December 2024 to 2.7% last month.
Duggal says that based on the 2022 – 2024 market, upscale housing may still prove more resilient in prices, having experienced a smaller decline in annual appreciation when rates jumped and demand slowed (falling 7.5% compared to 10.1% for mid-market and 10.5% for workforce).
“The good news is unlike during the Great Recession where people were forced out of their houses, most people aren’t underwater in their houses right now,” she says.
Using the relative affordability data also allowed Homes.com to better understand how much workforce housing has surged in certain metros. While other data and anecdotal evidence has shown that affordability has become a huge factor in many regions, controlling for relatively high (or low) prices paints a different picture.
According to the data, workforce housing appreciated by over 100% in 14 different metros since 2016, with Tampa Bay, Florida, seeing a spectacular 214% increase in value for the bottom quarter of price points.
Duggal says the regional patter, and specific explosion of prices in certain metros, is likely explained by homes being “attainable” in places with significant in-migration.
She specifically highlighted Providence, Rhode Island (which has topped other housing market forecasts) as an example of this dynamic.
“Not only is (Providence) small, but (it is) benefiting from out migration from other cities, maybe like Boston or New York—people moving out of the more higher-priced areas, potentially into places like Rhode Island, which is not lower priced by the rest of the country’s metrics, but compared to some of the other Northeastern cities, it’s still maybe a little more attainable,” she said.
Size and shape
The other metric Homes.com sought to delineate was through number of bedrooms. Rather than just look at square footage, or compare condos with detached single-family or multifamily, the report separated properties into three categories: one bedroom, two or three bedrooms and four-plus bedroom homes.
In terms of price appreciation, homes with two or three bedrooms won out across all time periods measured, with 7.6% average annual appreciation from 2016 to the present, compared to 5.6% for one bedroom and 6.5% for four-plus.
Duggal notes that one-bedroom properties somewhat counterintuitively saw their highest appreciation during the pandemic, when the narrative was that families were actually looking for more space rather than less.
“Anything I would guess would be completely speculation as to why a single-bedroom would pop up more during the pandemic, because we can see the data but don’t necessarily know the cause of the data,” Duggal says, adding that while condos make up an outsized number of one-bedroom properties, there are plenty of regions (particularly on the coasts) with detached one-bedroom homes making up a significant portion of their housing stock.
Larger four-plus-bedroom homes are often slightly newer, Duggal says, which could at least partially explain the difference in appreciation, although she cautions that is not something she specifically researched.
Notably, in the last couple years, there was almost no difference in appreciation between different numbers of bedrooms, with the biggest disparities coming before the pandemic. If 2025 reverted back to a more “normal” market, the two- and three-bedroom homes might outstrip the other categories based on that history.
Looking both back and to the future, Duggal says that even though markets have appeared unusual and volatile, the pattern seen in overall price appreciation isn’t necessarily as odd as it seems.
“It depends on when you buy your house, but generally over time, housing is a stable sort of place for people to invest their money,” she says. “If you don’t have to leave and you don’t lose your home or your job…if people wait it out long enough, eventually the housing market has shown itself to be relatively resilient over time.”
