What You Really Need To Know About Home Prices

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 those worried about falling prices, here’s the essential info you need.

Much of this fear likely stems from media reports and online articles. But remember, negative news tends to attract more attention. Often, what you read or hear may not give the full story, but rather a sensationalized version aimed at getting clicks. Jay Thompson, a Real Estate Industry Consultant, puts it clearly:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting 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 no exception.”

Analyzing the Data

Home Prices Rose the Majority of the Past Year

Monthly home price changes are reported by Case-Shiller. From January 2023 through the latest available data, the overall trend is upward.

Imagine a graph with green bars representing months when home prices rose, and red bars for months with declines. Focusing on the green shows that home prices increased most of last year. However, if you only look at the red, you might only notice the minor dips—exactly what sensational media stories often highlight.

However, the data tells a more positive story. There’s significantly more green than red. Even for the two red bars, they are so minor that they’re nearly flat. Over the entire year, home prices have risen overall.

It's common for home price growth to slow down in winter due to fewer people moving during the holidays and the start of the year, which reduces the upward pressure on prices. That’s why even the green bars toward the year's end show smaller gains.

The overall narrative is clear: prices went up last year, not down.

Case Shiller sums it up:

“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.”

Even the experts tracking home prices suggest the minor dips are nothing to worry about. They point out that overall, home prices have grown throughout the year.

Bottom Line

The data clearly shows that, overall, home prices have risen over the past year. If you have concerns or questions about what’s happening with home prices in your area, it’s a great idea to discuss them with a knowledgeable local.