Are Home Prices Going To Come Down?
Pricing Laura Miller Edwards Realty Group August 8, 2024
Pricing Laura Miller Edwards Realty Group August 8, 2024
Today’s headlines and news stories about home prices are confusing and make it tough to know what’s really happening. Some say home prices are heading for a correction, but what do the facts say? Well, it helps to start by looking at what a correction means.
Here’s what Danielle Hale, Chief Economist at Realtor.com, says:
“In stock market terms, a correction is generally referred to as a 10 to 20% drop in prices . . . We don't have the same established definitions in the housing market.”
In the context of today’s housing market, it doesn’t mean home prices are going to fall dramatically. It only means prices, which have been increasing rapidly over the last couple years, are normalizing a bit. In other words, they’re now growing at a slower pace. Prices vary a lot by local market, but rest assured, a big drop off isn’t what’s happening at a national level.
From 2020 to 2022, home prices skyrocketed. That rapid increase was due to high demand, low interest rates, and a shortage of homes for sale. But, that kind of aggressive growth couldn’t continue forever.
Today, price growth has started to slow down, which is a sign the market is beginning to normalize. The most recent data from Case-Shiller shows that after being basically flat for a couple of months last year, prices are going up at a national level – just not as quickly as before (see graph below):
The big takeaway? So far this year, there’s been a much healthier pace of price growth compared to the pandemic.
Of course, that’s what’s happening now, but you may be wondering what’s next for prices. Marco Santarelli, the Founder of Norada Real Estate Investments, says:
“Expert forecasts lean towards a moderation in home price growth over the next five years. This translates to a slower and more sustainable pace of appreciation compared to the breakneck speed witnessed in recent years, rather than a freefall in prices.”
It’s all about supply and demand. Increasing inventory plus limited buyer demand, due to relatively high mortgage rates, will continue to ease some of the upward pressure on prices.
If you’re thinking about buying a home, slowing price growth is welcome news. Skyrocketing home prices during the pandemic left many would-be homebuyers feeling priced-out.
While it’s still a good thing to know the value of the home you buy will likely continue to go up once you own it, slowing price gains are making things feel more manageable. Odeta Kushi, Deputy Chief Economist at First American, says:
“While housing affordability is low for potential first-time home buyers, slowing price appreciation and lower mortgage rates could help — so the dream of homeownership isn't boarded up just yet.”
At the national level, home prices are not going down. And most experts forecast they’ll continue growing moderately moving forward. But prices vary a lot by local market. That’s where a trusted real estate agent comes into play. If you have questions about what’s happening with prices in our area, reach out.
This blog post previously appeared on https://www.simplifyingthemarket.com/en/2024/07/29/are-home-prices-going-to-come-down?a=106260-312309902871c1f0d820820f58bf8fde. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group will not be liable for any loss or damage caused by your reliance on the information or opinions. contained herein.
Stay up to date on the latest real estate trends.
First Time Home Buyers
If you’re like a lot of aspiring homebuyers, there’s a major hurdle standing in your way — the cost of living.
For Sellers
The way your agent markets your house can be the difference between whether or not it stands out and gets attention from buyers. That’s why it’s so important to work w… Read more
For Buyers
Buying a home can feel like a challenge with today’s mortgage rates. Buying now before the spring rush might actually give you the upper hand.
Pricing
There’s one big mistake you need to avoid when you sell your house this year: setting your price too high.
Home Buying
If you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list.
Home Equity
As home values rise, so does your net worth. And, if you’ve been in your house for a few years (or longer), there’s a good chance you’re sitting on a pile of equity — … Read more
For Sellers
Here are a few quick FAQs that can help you decide how much you should prioritize staging as you prep for your move.
Agent Value
The automated estimates you’re seeing online often miss key details that affect the true market value of your home.
Pricing
You may be wondering if home prices are going to crash. But experts agree that's not what's in the cards – and here's why.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.