The top of the list currently runs 13–14% annualized over five years — meaning a home that was worth $200K in 2021 is now worth around $370K. Those are real numbers, computed from the same Zillow ZHVI index that powers every ZIP page on this site. They are also, statistically, the worst predictor of which ZIPs will lead the next five years.
Every month we recompute 5-year home-price appreciation for every ZIP code in America. The list below is the current top 10 by 5-year compound annual growth rate (CAGR), pulled live from the same Zillow data that powers every ZIP page on this site.
A note before the list: the highest-appreciation ZIPs are rarely the ones you want to be buying right now. The list tells you where prices have moved fastest. It does not tell you where they'll move fastest next, and historically those two lists overlap less than people assume. Read the cautions section after the table.
The list
| # | ZIP | City | 5-year CAGR |
|---|---|---|---|
| 1 | 61101 | Rockford, IL | 14.2% |
| 2 | 37916 | Knoxville, TN | 14.1% |
| 3 | 12754 | Liberty, NY | 14.0% |
| 4 | 33496 | Boca Raton, FL | 13.8% |
| 5 | 92603 | Irvine, CA | 13.3% |
| 6 | 92008 | Carlsbad, CA | 13.2% |
| 7 | 08104 | Camden, NJ | 13.1% |
| 8 | 85253 | Paradise Valley, AZ | 13.1% |
| 9 | 08701 | Lakewood CDP, NJ | 13.1% |
| 10 | 33146 | Coral Gables, FL | 13.1% |
What these markets share
Three patterns dominate the current top 10. Each tells you something different about why prices moved.
- Ultra-luxury enclaves had a great five years. Five of the top 10 are high-end zip codes in coastal Florida, California, and Arizona: Boca Raton, Irvine, Carlsbad, Paradise Valley, Coral Gables. Typical home values in these ZIPs range from $1M to over $3M. The story is the same in each: pandemic-era buyers with cash and remote-work mobility absorbed inventory at premium prices in places they considered better trade-offs than the dense urban cores they were leaving. Returns are real, on absolute-dollar bases that dwarf most of the rest of the list — but the same dynamic also pushed these markets to the top of price-to-income ratios, which is the leading indicator for the next correction.
- Two distressed-recovery cities + one Sun Belt growth market. Rockford, IL (#1), Camden, NJ (#7), and Knoxville, TN (#2) come from a completely different place than the luxury entries. Rockford and Camden started extremely cheap (median home values below $150K) and benefited from the "discover affordable Midwest/Northeast" wave. Knoxville is the more straightforward Sun Belt growth story — Tennessee's third-largest city, with strong net migration and supply that hasn't kept up. These are the markets where the appreciation actually translates into reasonable price levels on exit.
- Demographic-specific anomalies. Lakewood, NJ (#9) is the standout — at 139,000 population, it's by far the largest entry on the list, and it appreciated 13% annually because of a specific and well-documented demographic story (rapid Orthodox Jewish community growth + housing demand outpacing supply for over a decade). Liberty, NY (#3) sits in Sullivan County in the southern Catskills — a smaller market where vacation-home and remote-work demand showed up in a meaningful way post-2020.
None of these patterns is automatically bad. But they reshape how you should interpret the list. A 13%-CAGR luxury ZIP and a 13%-CAGR Midwest distressed-recovery ZIP are completely different bets — the first paid you in dollars off a $2M base, the second paid you in percentage off a $100K base. Don't conflate them.
A note on what's NOT on this list: the mid-sized Sun Belt growth metros (Boise, Spokane, Phoenix, Tampa) that dominated this ranking two years ago have largely mean-reverted. They're in the top 50, not the top 10, after a 2022–2023 cooling. The list is a fact about the past five years, not a forecast of the next five.
What the bands actually mean
The single number "12% five-year CAGR" hides a lot of variance. Translating it into dollar terms at three price points clarifies what the list is actually showing you:
- 12% CAGR on a $200K starting home value → $352K after 5 years. A $152K absolute price increase. The dollar return is real but small, and the property's still a sub-$400K home — limited buyer pool when you go to sell.
- 8% CAGR on a $500K starting home value → $735K after 5 years. A $235K increase. Bigger dollars, narrower CAGR — but probably broader buyer pool at exit.
- 5% CAGR on a $1M starting home value → $1.28M after 5 years. A $280K increase from a much lower-CAGR ZIP. Lowest percentage, highest absolute dollar return.
Don't optimize for the headline CAGR. Optimize for the absolute dollar return you actually need, then pick the price band that gets you there with acceptable risk.
What to watch out for
Specific things to verify before any of these ZIPs go on your buy list:
- The starting price band. A $180K ZIP appreciating 14%/year and a $1.4M ZIP appreciating 6%/year deliver very different absolute returns and require very different capital commitments.
- The recent slope. Has the appreciation continued in the last 12 months, or has it stalled? The 5-year CAGR can hide a recent flattening. Visit each candidate ZIP's price-history chart and check Step 4 of that guide specifically.
- The yield. High-appreciation ZIPs typically have compressed rental yields. If you need cash flow, this list is the wrong starting point — see the 10 highest rental-yield ZIPs instead.
- Migration trajectory. Population flowing in tends to extend appreciation runs; flowing out tends to end them. The ZIP page's migration section has the data.
- The supply pipeline. Markets with recent permit-volume spikes often see appreciation falter 18–36 months out as inventory absorbs. Local newspaper development desks and Bisnow / Inman cover this; pull a few headlines before committing.
How we calculate this
Five-year CAGR = (latest typical home value / typical home value 5 years ago) ^ (1/5) − 1.
- Home value comes from Zillow's Home Value Index (ZHVI), smoothed and seasonally adjusted, at the ZIP level.
- We use 5 years rather than 1, 3, or 10 because 5 captures a meaningful cycle without being so long that early-window noise dominates.
- ZIPs with insufficient ZHVI history (e.g., new development areas, small population ZIPs) are excluded — the index needs enough transaction volume to produce a stable estimate.
This is appreciation only. It excludes rent and operating costs, so total return on a real investment in any of these ZIPs depends on your specific deal economics. The list tells you where prices went, not what you'd have netted.
Compare to the yield list
The interesting analytical move is to put this list side-by-side with the highest-rental-yield ZIPs. The overlap between "appreciation top 10" and "yield top 10" is almost always zero — markets that paid you in rent generally weren't appreciating, and markets that appreciated weren't paying you much in rent.
This isn't a coincidence. It's the same dollar of returns showing up in different rows. Investors who win consistently choose which row they want it in (yield-led vs. appreciation-led) and build their portfolio around that single choice. Investors who chase both rows at once usually end up with portfolios that excel at neither.
If you've never made this choice deliberately, this list is a good occasion to do it.
What we'd actually do with this list
The verdict — the part the data alone can't tell you:
- Don't use this list to pick what to buy next. Use it to understand the residue of the last cycle. Past five-year leaders are the worst predictors of the next five years; that's not opinion, it's the most consistent pattern in residential real estate.
- Pay attention to who appears on the list and isn't a resort town. Resort and second-home markets (Snowmass-type ZIPs) inflate the list because their median home values are small samples of a captive buyer pool. Filter mentally for the primary-residence ZIPs on the list — those are the ones whose appreciation might compound for another two or three years before fully mean-reverting.
- Cross-reference with the highest-rental-yield list. The overlap is nearly zero — if you find a ZIP on both, that's structurally rare and worth a real look (it usually means a small ZIP with idiosyncratic data).
- Look at the slope of the LAST 24 months specifically. A ZIP with a 14% CAGR built mostly from the 2020–2022 spike but flat since is fundamentally different from one with a 12% CAGR that's still accelerating. See how to read a price-history chart — Step 4 specifically — for how to read this.
The verdict for most readers: this list is most useful as an early-warning indicator for which markets are at the top of a cycle, not as a buy signal. If you're tempted to buy from it, the cap-rate side of the underwriting (you can model it in the cap rate explainer) is where you'll find out whether the appreciation story still has room to run.
Frequently asked
Is past appreciation a good predictor of future appreciation? No — it's among the worst predictors among residential real-estate metrics. Markets that have appreciated 15%/year recently are statistically more likely to underperform the national average over the next five years than to keep outperforming. The pattern is consistent enough to have a name in academic literature: mean reversion. Use this list to learn about where capital flowed, not where it will flow next.
Which markets actually predict future appreciation better? Net inbound migration, supply constraints (low permit volume relative to population growth), job-market strength, and rent growth — in that rough order. None of these is on this page; they live on each individual ZIP page (migration section + demographics) and require a market-by-market read.
Why is there a population floor on this ranking? ZHVI is computed from transaction volume, and ZIPs with very small populations (under a few thousand) often have so few monthly transactions that the index becomes statistically noisy — a couple of unusual sales can move the headline by several percentage points. We apply a 3,000-population floor to this ranking (matching the floor on the highest-rental-yield ranking per ADR 0017+0030) so the top 10 surfaces real cities a reader can validate, not single-digit-transaction CDPs that happened to record one big sale.
How often is this list updated? Monthly. Zillow refreshes ZHVI monthly; we recompute 5-year CAGR across every ZIP each refresh and republish the ranking. ZIPs with less than 5 full years of stable ZHVI history are excluded so the CAGR isn't dominated by early-window noise.
Data: Zillow ZHVI, latest available month, ZIP-level. 5-year CAGR computed as (latest / 5-years-ago)^(1/5) − 1. Refreshed monthly. 3,000-population floor applied per ADR 0030. See methodology for the full calculation.