Home Prices Are Not Falling

In the final quarter of the previous year, certain housing experts predicted a potential crash in home prices for 2023. The media enthusiastically embraced these projections, disseminating headlines that painted a bleak picture for the housing market. This barrage of negative coverage understandably instilled doubts in many regarding the robustness of the residential real estate sector.

However, if these reports led you to question the timing of your own relocation plans, it's crucial to understand the reality.

Contrary to the sensational headlines, the factual data illustrates that home prices exhibited remarkable resilience, outperforming the grim narrative propagated by the media (refer to the graph below).

This chart utilizes data from three reputable sources to vividly demonstrate that prices have not only rebounded but have shown only minor, temporary declines on a national scale. This stands in stark contrast to the anticipated crash portrayed in many articles. The reported declines, depicted in red, were not severe and were of brief duration. As noted by Nicole Friedman, a Wall Street Journal (WSJ) reporter, "Home prices aren't falling anymore. . . The unexpectedly swift recovery indicates that the residential real estate downturn is proving to be briefer and less severe than anticipated by many housing economists." Despite media emphasis on home prices retracting, the modest correction has already been surpassed, affirming that home prices are on an upward trajectory once again.

What lies ahead for home prices? Experts concur that home price growth will persist in the coming years, returning to more typical levels for the market. This suggests that while we anticipate continued appreciation, it will occur at a more measured pace than the robust increases witnessed in recent years – a positive adjustment. However, some media outlets may interpret this slowdown as a decline, potentially leading to misleading narratives. The resurgence of such headlines is already impacting homebuyer sentiment, as reflected in the Consumer Confidence Survey from Fannie Mae (refer to the graph below).

While the percentage of Americans anticipating a decline in home prices has seen a gradual decrease this year, recent Consumer Confidence data, as highlighted in red, indicates a recent uptick. This shift is notable, particularly considering that the actual home price data demonstrates an upward trajectory, not a decline. It underscores the influence the media still wields over public sentiment.

Resist the pull of negative headlines and avoid becoming part of this statistical trend. It's crucial to bear in mind that data from multiple sources consistently indicates that home prices are no longer on the decline.

In summary, despite media narratives that may sound pessimistic, the data unequivocally shows that home prices are no longer decreasing. Therefore, there's no need to be swayed by alarming headlines or to postpone your plans. Rely on a real estate professional as a trusted resource to navigate through the noise and provide accurate insights into the real situation in your area.