Almost one in four people still think that home prices are going to drop, according to recent data from Fannie Mae. If you’re worried about falling home prices, let me help put your mind at ease.
Much of this concern likely stems from the dramatic headlines and stories circulating in the media. Remember, negative news tends to attract more attention. You might not be getting the whole story, just the parts designed to make you click. Real Estate Industry Consultant Jay Thompson put it well when he said: “Housing market headlines are everywhere, many of them sensational, predicting doom for the industry. This kind of clickbait has been a problem since the dawn of the internet.”
Let’s set the record straight by looking at the actual data.
Looking at the monthly home price changes reported by Case-Shiller from January 2023 through the most recent data.
What do you see when you look at this graph? If your eyes are drawn to the green, you’ll notice that home prices have mostly been on the rise over the past year. If you focus on the red, you might only see a couple of minor declines—a common focus in the media, which often highlights the negative. However, these minor dips don’t overshadow the overall trend: prices have continued to climb.
It’s normal for home price growth to slow during the winter months due to fewer people moving over the holidays and the start of the new year, which puts less upward pressure on prices. That’s why even the green bars towards the year’s end show smaller gains.
In summary, as reported by Case Shiller: “Month-over-month numbers were relatively flat, but the annual growth was more significant, rising 7.4 percent and 6.6 percent, respectively.” This indicates that while there were slight dips, the overall trend was a significant increase in home prices.
Bottom line: The data clearly shows that home prices, in general, have risen over the past year. If you have any concerns or questions about local home prices or what this means for you, let’s have a conversation.