According to recent data from Fannie Mae, almost 1 in 4 people still think home prices are going to come down. If youre one of the people worried about that, heres what you need to know.
A lot of that fear is probably coming from what youre hearing in the media or reading online. But heres 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.
Heres a look at the data to set the record straight.
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, heres what youd see:
What do you notice when you look at this graph? It depends on what color youre more drawn to. If you look at the green, youll see home prices rose for the majority of the past year.
But, if youre 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.
Heres what this data really says. Theres a lot more green in that graph than red. And even for the two red bars, theyre so slight, theyre practically flat. If you look at the year as a whole, home prices still rose overall.
Its perfectly normal in the housing market for home price growth to slow down in the winter. Thats because fewer people move during the holidays and at the start of the year, so theres not as much upward pressure on home prices during that time. Thats why, even the green bars toward the end of the year show smaller price gains.
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 very slight dips are nothing to worry about, why be concerned? Even Case-Shiller is drawing your attention to how those were virtually flat and how home prices actually grew over the year.
The data shows that, as a whole, home prices rose over the past year. If you have questions about whats happening with home prices in your local area, connect with a trusted real estate professional.