The calculator grows today's value by a fixed yearly rate, compounding once a year. At 4% a year, a $400,000 home would be worth $876,449 after 20 years.
The math is the easy part. The hard part is choosing a rate that fits your asset, and knowing what the result leaves out.
Where to find a rate that fits your home
For US homes, the Federal Housing Finance Agency (FHFA) tracks prices with its House Price Index. It uses a repeat-sales method, which follows the same single-family homes over time. In its August 25, 2026 release, prices rose 2.1% between the second quarters of 2025 and 2026.
That national figure hides a wide spread:
- East North Central division: up 4.5%, the strongest division.
- Pacific division: only slightly above 0%.
- Alaska: up 8.3%, the top state.
- New Mexico: down 1.2%, the biggest decline among the states.
One year is a poor guide to the next twenty. FHFA also reports states and metro areas, so measure your own market over a longer stretch. Then turn that total change into a yearly rate with the compound growth calculator.
What a steady rate adds up to
Small differences in the rate open large gaps over a long ownership. Here's the same $400,000 home at 2%, 4% and 6% a year:
A $400,000 home at three appreciation rates
Value at the end of each year, compounded once a year
- 6% a year $2,297,396
- 4% a year $1,297,359
- 2% a year $724,545
Show the values
| Year | 6% a year | 4% a year | 2% a year |
|---|---|---|---|
| 5 | $535,290 | $486,661 | $441,632 |
| 10 | $716,339 | $592,098 | $487,598 |
| 20 | $1,282,854 | $876,449 | $594,379 |
| 30 | $2,297,396 | $1,297,359 | $724,545 |
After 30 years, the 6% line ends at $2,297,396, more than three times the 2% line. On every line, the later years add the most, because each year's gain is figured on a bigger value.
Rising in dollars, falling in buying power
The results are nominal: they don't adjust for inflation. That matters more than it seems. Consumer prices rose 3.5% in the 12 months to June 2026, according to the Bureau of Labor Statistics.
Set that against FHFA's 2.1% for roughly the same year: 1.021 ÷ 1.035 = 0.986. The typical home gained dollars but lost about 1.4% in buying power. To compare, run today's value through the inflation calculator at your expected inflation rate. A projection that doesn't beat that figure is a real-terms loss.
Values can fall, but the rate box can't
Declines happen, as New Mexico's figure shows. This calculator only models growth: a negative rate is treated as 0%, so the value simply stays flat.
To test a falling market, use the depreciation calculator. It shrinks a value by a fixed percentage each year, the mirror image of appreciation.
Appreciation isn't the same as taxable gain
For a US home sale, the IRS works from gain. Publication 523 (2025) puts it plainly: "Subtract the adjusted basis from the amount realized to get your gain or loss." The cost of improvements adds to that basis.
Much of that gain can be tax-free. You may exclude up to $250,000 of it, or $500,000 on a joint return. Usually, you must have owned and lived in the home for at least two of the last five years.
Long ownership can push appreciation past those limits. Here's a $500,000 home at 3% a year:
| Years owned | Value at 3% a year | Appreciation |
|---|---|---|
| 10 yr | $671,958 | $171,958 |
| 15 yr | $778,984 | $278,984 |
| 20 yr | $903,056 | $403,056 |
| 25 yr | $1,046,889 | $546,889 |
| 30 yr | $1,213,631 | $713,631 |
At this rate, appreciation passes $250,000 between years 10 and 15, and $500,000 between years 20 and 25. Any improvements you have paid for lower the gain, because they add to your basis. This is general information about federal rules, not tax advice.
Sources
- FHFA, U.S. House Prices Rise 2.1 Percent Year over Year; Up 0.3 Percent Quarter over Quarter (news release, August 25, 2026)
- U.S. Bureau of Labor Statistics, Consumer Price Index – June 2026 (news release, July 14, 2026)
- IRS, Topic no. 701, Sale of your home (reviewed September 24, 2026)
- IRS, Publication 523 (2025), Selling Your Home