According to the latest data from Fannie Mae, 23% of Americans still think home prices will go down over the next twelve months. But why do roughly 1 in 4 people feel that way? It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a price crash and those concerns are still lingering.
You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down. If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market? The answer is simple. Listen to the professionals who specialize in residential real estate. Here’s the latest data you can actually trust.
Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. Data shows prices have already rebounded this year after that slight decline in 2022 (see graph below):
As you can see, the dip in prices was temporary, and the market quickly corrected itself. This is not uncommon in the real estate market, as it goes through cycles of ups and downs. However, the overall trend over the years has been a steady increase in home prices.
Experts point to several factors that support the upward trajectory of home prices. First and foremost, there is a shortage of housing inventory in many areas. Demand for homes is high, but the supply is limited. This creates a competitive market where buyers are willing to pay a premium for properties.
Additionally, mortgage rates remain historically low, making homeownership more affordable for many. Low interest rates make borrowing money cheaper, which encourages buyers to enter the market and drives up prices.
Another factor contributing to the rise in home prices is inflation. As the cost of goods and services increases, so does the cost of building materials and labor. This leads to higher construction costs, which are passed on to buyers in the form of higher home prices.
Furthermore, the pandemic has shifted priorities for many people. Remote work has become more prevalent, leading some individuals and families to seek larger homes with dedicated office spaces. This increased demand for larger properties has driven up prices in certain segments of the market.
So, while it’s understandable to have concerns about home prices given the media coverage and opinions circulating on social media, it’s important to rely on trustworthy sources for accurate information. Housing market experts who study and analyze data provide valuable insights into the real estate market.
Ultimately, the decision to buy or sell a home should be based on your personal circumstances and financial goals. If you’re considering entering the housing market, consult with a real estate professional who can guide you through the process and provide you with the most up-to-date information specific to your local market.
