Over the past few years, home prices skyrocketed. That’s been frustrating for buyers, leaving many wondering if they’d ever get a shot at owning a home. But here’s some welcome news: that whirlwind pace of home price growth is slowing down.
Home Prices Are Rising at a Healthy Pace
At the national level, home prices are still going up, but at a much more moderate, normal pace. For example, in November, the year-over-year increase in home prices was just 3.8% nationally, according to Case-Shiller. That’s a far cry from the double-digit spikes that occurred in 2021 and 2022 (see graph below):
This more normal home price growth might make buying a home feel more attainable for many buyers. You won’t face the same sticker shock or rapid price jumps that made it hard to plan your purchase just a few years ago.
At the same time, steady growth means the home you buy today will likely appreciate in value over time.
Prices Vary from Market to Market
While the national story is one of moderate price growth, it’s important to remember that all real estate is local. Some markets are seeing stronger growth, while others are cooling off or even seeing slight declines. As Selma Hepp, Chief Economist at CoreLogic, notes:
“Regionally, variations persist, as some affordable areas – including smaller metros in the Midwest — remain in high demand and continue to see upward home price pressures.”
Meanwhile, other regions saw slight month-over-month declines in November, according to Federal Housing Finance Agency (FHFA) data (see graph below):
What does this mean for you? It’s crucial to understand what’s happening in your local market. A national average can’t tell the whole story. That’s where working with a local real estate agent can really help. They have the tools and expertise to give you the full picture of what’s happening in your area and how to plan for that in your move.
Home price growth is moderating, and that’s great news for buyers and sellers alike. After a period of rapid appreciation, the market is stabilizing, creating a more balanced environment. For buyers, this means less competition, more inventory, and a better chance of securing a home without overpaying. With prices leveling out, affordability improves, making homeownership more attainable.
Sellers can also benefit from a moderating market. While prices aren’t skyrocketing, homes are still appreciating at a steady, healthy rate. This stability reduces the risk of a market bubble while ensuring that properties retain value. A more balanced market attracts serious buyers, leading to smoother transactions and fewer complications.
For investors, moderating price growth provides a strategic advantage. It allows for more predictable returns and opportunities to purchase properties at fair market value. Without the pressure of rapidly rising prices, investors can make informed decisions and plan for long-term gains.
Overall, a more stable housing market creates a healthier environment for everyone involved. Buyers gain more options and negotiating power, sellers enjoy steady appreciation, and investors can plan with confidence. If you’ve been considering buying, selling, or investing, now is a great time to explore your options.
Have questions about the market or your real estate goals? Let’s connect and discuss how you can take advantage of these changes!
How have changing home prices impacted your plans to buy? Let’s talk about it.
