Most experts agree that a good rule of thumb is that homes appreciate about four to five percent per year. This number varies a little depending on the year, location, etc.
Now at first, 5% doesn’t seem like that much, after all you could easily earn more investing in stocks or bonds, but let’s take a second look.
Lets say you bought a $200,000 new home in Charleston, and made a $40,000 down payment. At a rate of 5%, your $200,000 home’s value appreciated by $10,000 the very first year. You just earned $10,000 on a $40,000 investment, a 25% “return on investment.”