Recent data from Fannie Mae reveals that nearly a quarter of individuals still harbor concerns about a potential downturn in home prices. If you find yourself among those apprehensive about this prospect, here’s what you should bear in mind.
Much of this apprehension likely stems from media reports or online articles. However, it’s crucial to recognize that sensationalism sells. Consequently, what you’re exposed to may not present the complete picture but rather a clickbait version. As Jay Thompson, a Real Estate Industry Consultant, aptly states:
“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.”
Let’s delve into the data to dispel any misconceptions.
Home Prices Displayed Consistent Growth Throughout the Past Year
Case-Shiller publishes a monthly report on the percentage of monthly home price fluctuations. Reviewing their data from January 2023 to the latest available figures reveals the following trend:
What catches your eye depends on your color preference. If you focus on the green bars, you’ll observe a consistent rise in home prices over the majority of the past year. However, those drawn to the red may fixate on the two minor declines, a tendency often exacerbated by media coverage. Yet, this overlooks the broader context.
In reality, the data indicates a prevalence of green bars with only two minimal declines, which are practically negligible. Viewing the year holistically, home prices exhibited overall growth.
It’s typical for home price appreciation to decelerate during the winter months due to reduced relocation activity amidst the holidays and the onset of the new year, resulting in less upward pressure on prices. Consequently, even the green bars toward the year’s end illustrate smaller gains.
In essence, the overarching narrative is one of ascending prices, not descending.
To summarize, Case Shiller, the source of the aforementioned data, elucidates:
“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.”
Given that expert organizations tracking home price trends dismiss these minimal dips as inconsequential, there’s little cause for concern. Even Case-Shiller emphasizes the marginal nature of these declines and underscores the overall growth in home prices throughout the year.
In Conclusion:
The data unequivocally demonstrates that home prices experienced an upward trajectory over the past year. If you seek clarity on home price trends in your locale, reach out to a Benson & Mangold Agent.
