Are Housing Values Keeping up with Inflation? A 2023 ACS Data Update

As the discussion about rising home prices continues, we wanted to provide an update on an article published in 2022 looking at the ACS 5-year Median Home Values and how home values were keeping pace with inflation across the state.  That article showed that while statewide home values had indeed increased, the increase was not seen evenly across the state.  We also identified counties where home values were increasing, staying steady and decreasing when adjusted for inflation.

Using the same methodology, we reviewed the 2023 estimates, the most recent data available from the U.S. Census Bureau’ American Community Survey (ACS), to see if there were any changes.

Statewide Results

Inflation-adjusted median home values have increased each year from 2014 to 2023.  The median home value has increased a whopping 55% over that period.  Note that ACS (Table B25077) did not release a 1-year estimate for 2020 and the BLS’s CPI-U was used to inflate prices to 2023 values.

Figure 1. NC Median Home Values (1-year Estimates, 2014-2023)

Source: Created by LEAD Staff using data from U.S. Census Bureau American Community Survey, 1-year estimates 2014-2023; Adjusted for inflation using the Consumer Price Index (CPI-U); 1-year estimates were not provided for 2020.

Is the growth experienced across the state?

Continuing the same methodology we also analyzed the ACS 5-year estimates for 2018 and 2023 to learn whether all counties were experiencing the significant inflation adjusted growth seen in the statewide 1- year estimates.

Figure 2. Comparison of County Median Home Values (2018 and 2023 5-year Estimates)

Source: NC Department of Commerce calculations using U.S. Census Bureau’s American Community Survey, 5-year estimates; 2018 & 2023

Our analysis revealed that, when adjusted for inflation, 77 of the 100 counties experienced an increase in median home values. It also revealed that no counties experienced a decrease in the median home value while only 23 counties saw their median home value remain steady when comparing the 2018 and 2023 5-year estimates.

The counties which experienced steady median values include: 

While these counties are distributed across the state, mostly located in the east, southeast and west, there are some common elements:

1. They are mostly in rural areas. Only two counties are in Metropolitan Statistical Areas, Anson and Gates Counties.
2. Almost all are losing population.  Only Jackson County experienced a population increase between 2014 and 2023.  

How have things changed?

1. While the initial analysis showed a limited number of counties with home values outpacing inflation, the current data indicates a significant expansion of this trend statewide.
2. The initial analysis also showed a moderate correlation between county population gains and increasing values while the current data showed a weak correlation.  This further validates the initial conclusion that there are additional factors to changing home values beyond population change.

Conclusion

According to the data, median home values outpaced inflation in all growing counties while only matching inflation in a few of the declining areas. Values are expected to continue rising statewide, particularly in growth regions as shown by the 1-year estimate.

This analysis is limited by the 5-year average data used, potentially understating recent growth since NC home values rose significantly after 2021 as shown in Figure 1 above. Whether the 23 identified counties are currently experiencing accelerated growth in home values will become clearer with future data releases.