Recent data from Fannie Mae reveals that nearly 25% of individuals still anticipate a decline in home prices. If you find yourself among those concerned, here’s what you should know.
Much of this apprehension likely stems from what you encounter in the media or online. However, it’s essential to bear in mind that negative news tends to garner attention. Consequently, you might not be receiving the complete picture but rather a sensationalized version designed for clicks. As Jay Thompson, a Real Estate Industry Consultant, points out:
“Housing market headlines are ubiquitous. Many are alarmist, concluding with exclamation points or foretelling imminent doom for the industry. Clickbait, the sensationalization of headlines and content, has been a concern since the early days of the internet, and housing news is not exempt from it.”
Let’s delve into the data to clarify matters.
Home Prices Demonstrated Overall Growth in the Past Year
Case-Shiller publishes a monthly report detailing the percentage of monthly home price fluctuations. Examining their data from January 2023 to the latest available figures, here’s what you’ll find:
[Insert graph displaying green bars representing price increases and a few red bars indicating minor declines]
What stands out to you upon viewing this graph? It largely depends on which color catches your eye. If you focus on the green, you’ll observe that home prices experienced growth for the majority of the past year.
However, if the red draws your attention, you might only zero in on the two slight declines. This is a common tendency in media coverage. Since negative news tends to attract attention, these minor downturns often receive disproportionate focus. Yet, this overlooks the broader context.
Here’s the crux of the matter: the graph predominantly features green bars, indicating price increases. Even the two red bars denote such slight declines that they are virtually negligible. When viewed over the course of the entire year, home prices still exhibited overall growth.
It’s entirely typical for home price appreciation to decelerate during the winter months. This occurs because fewer people relocate during the holidays and early in the year, resulting in reduced upward pressure on home prices. Hence, even the green bars toward the year’s end reflect smaller price gains.
The overarching narrative is clear: home prices increased last year, rather than declining.
To encapsulate, according to Case-Shiller, the source of the graph’s data mentioned above:
“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 a reputable organization tracking home price trends assures that these slight dips are nothing to fret over, why should you be concerned? Even Case-Shiller underscores how these were essentially flat and underscores the overall growth in home prices over the year.
In summary, the data indicates that home prices rose overall in the past year. If you have inquiries regarding the state of home prices in our area, I’d be happy to discuss further.
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