Home Prices Did Rise Last Year
According to recent data from Fannie Mae, almost 1 in 4 people still think home prices are going to come down. If you’re one of the people worried about that, here’s what you need to know.
A lot of that fear is probably coming from what you’re hearing in the media or reading online. But here’s the thing to remember. Negative news sells. That means, you may not be getting the full picture. You may only be getting the clickbait version. As Jay Thompson, a Real Estate Industry Consultant, explains:
“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”
Here’s a look at the data to set the record straight.
Home Prices Rose the Majority of the Past Year
Case-Shiller releases a report each month on the percent of monthly home price changes. If you look at their data from January 2023 through the latest numbers available, you'll find a trend of increasing home prices.
But, some might focus on the minor declines indicated by red bars. This is what a lot of media coverage tends to emphasize. Since negative news sells, these slight dips are often highlighted. However, this approach overlooks the bigger picture.
In reality, there’s more to the story. The data reveals a predominant trend of price increases, with only minor fluctuations. Even during periods of slight decline, the changes are so negligible that they're practically flat. Overall, the trend indicates a rise in home prices over the past year.
It’s typical for home price growth to slow down in the winter months due to fewer people moving during the holidays. Consequently, there's less upward pressure on home prices during this period. This explains the smaller price gains observed towards the end of the year.
To summarize, Case Shiller, the source of the data, explains:
“Month-over-month numbers were relatively flat, . . . However, the annual growth was more significant for both indices, rising 7.4 percent and 6.6 percent, respectively.”
If even expert organizations like Case-Shiller consider the minor dips insignificant, why should you be concerned? Their assessment underscores the overall growth in home prices throughout the year. The data indicates a general trend of rising home prices over the past year. If you have questions about what’s happening with home prices in our area, let's chat.
