The Real Story Behind What’s Happening with Home Prices

The Real Story Behind What’s Happening with Home Prices

If you're trying to make sense of what's happening with home prices, you're not alone. With so much conflicting information, it can be challenging to decide your next steps.

As a buyer, you might be concerned about overpaying, while as a seller, you might worry about not getting the price you want.

Here's a quick overview to clarify what's really going on with home prices, whether you're planning to buy or sell.

Home Price Growth Is Slowing, but Prices Aren’t Falling Nationally

Across the country, home price appreciation is beginning to moderate. This means that while prices are still increasing, they're not climbing as rapidly as they did in recent years. The graph below, based on data from Case-Shiller, clearly illustrates the shift from 2023 to 2024:

However, it's important to note that this doesn't mean home prices are dropping. In fact, every bar on this graph indicates continued price growth. So, when you hear discussions about prices cooling, it simply means they're not rising as rapidly as they did during the boom a few years ago.

What’s Next for Home Prices? It’s All About Supply and Demand 

You might be wondering where home prices are headed next. The outcome depends on supply and demand, which can differ by local market. 

On a national scale, the number of homes for sale is increasing, but it's still not enough to satisfy current buyer demand. This imbalance is keeping pressure on prices to rise, even though the recent growth in inventory has slowed the pace of home price appreciation. As Danielle Hale, Chief Economist at Realtor.com, said:

“. . . today’s low but quickly improving for-sale inventory has ushered in more market balance than would otherwise be expected . . . This should help home prices maintain a slower pace of growth.” 

Another factor that could influence future home prices is the trend in mortgage rates. Since experts predict mortgage rates will continue to decline, it's likely that more buyers will re-enter the market in the coming months. If demand increases, it could push prices up even more.

Why You Should Work with a Local Real Estate Agent 

While national trends offer a broad perspective, real estate is always about local dynamics, especially regarding prices. What’s happening in your neighborhood could differ significantly from the national average, depending on local supply and demand. That’s why having insights from a knowledgeable real estate agent is essential.

A local agent can provide the most up-to-date data and trends specific to your area, making them your go-to resource for everything related to home prices.

If you're planning to sell, they can help you price your home accurately. And if you're ready to buy, they can assist in finding the right home that fits both your budget and your needs.

Bottom Line

Home prices are still on the rise, though not as rapidly as before. Whether you're considering buying, selling, or simply curious about your home's value, let's connect so you can receive the personalized guidance you need.