According to recent data from Fannie Mae, almost 1 in 4 people still think home prices will come down. If you're one of the people worried about that, here's what you need to know.
Much of that fear comes from what you hear in the media or reading online. But here's the thing to remember. Negative news sells. That means you may only be getting part of the 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 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 monthly report on the percentage of monthly home price changes. If you look at their data from January 2023 through the latest numbers available, here's what you'd see:
What do you notice when you look at this graph? It depends on what color you're more drawn to. Looking at the green, home prices rose most of the past year.
But, if you're drawn to the red, you may only focus on the two slight declines. This is what a lot of media coverage does. Since negative news sells, drawing attention to these slight dips happens often. But that loses sight of the bigger picture.
Here's what this data really says. There's a lot more green in that graph than red. And even for the two red bars, they're so slight, they're practically flat. If you look at the year, home prices still rose overall.
It's perfectly normal in the housing market for home price growth to slow down in the winter. Fewer people move during the holidays and at the start of the year, so there's not as much upward pressure on home prices. That's why even the green bars show smaller price gains toward the end of the year.
The overarching story is that prices went up last year, not down.
To sum all that up, the source for that data in the graph above, Case Shiller, explains it like this:
"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 one of the expert organizations tracking home price trends says the slight dips are nothing to worry about, why be concerned? Even Case-Shiller shows how those were virtually flat and how home prices grew over the year.
Bottom Line
The data shows that home prices rose over the past year. Let's chat if you have questions about what's happening with home prices in our area.