In the fourth quarter of last year, housing experts predicted a potential crash in home prices for 2023. The media amplified these forecasts with pessimistic headlines, causing widespread doubts about the residential real estate market’s strength.
If it made you question if you should delay your own plans to move, here’s what you really need to know.
Home Prices Never Crashed
Disregard what you saw in the headlines. The actual data shows home prices were remarkably resilient and performed far better than the media would have you believe (see graph below):
The graph in question relies on data from three reputable sources to demonstrate that home prices have already already bounced back, following only minor national declines. This recovery is a stark contrast to the anticipated crash that numerous articles had predicted.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal (WSJ), says:
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Despite the significant attention given to home price pullbacks in the media, it’s important to note that the slight correction has already passed. In fact, the data indicates that home prices are no longer falling; instead, they are on the rise.
What’s Next for Home Prices?
Experts generally agree that home price growth will persist in the coming years and is gradually returning to more typical levels for the market. This means that home prices will continue to appreciate, albeit at a slower pace compared to the rapid increases seen in recent years, which is considered a positive development.
Certain news sources may report on slowing home price growth and frame it in a way that suggests prices are declining once more. Unfortunately, these misleading headlines can influence the sentiments of homebuyers and create unnecessary concerns. It’s essential for consumers to stay informed with accurate and balanced information to make informed decisions in the real estate market. You can see how this affects general opinion in the Consumer Confidence Survey from Fannie Mae (see graph below):
Although the percentage of Americans anticipating a decline in home prices has been gradually decreasing, the latest Consumer Confidence data reveals an unexpected uptick in such sentiments (shown in red). This discrepancy is notable, considering that actual home price data indicates an upward trend rather than a decline. It underscores the significant influence that media reporting still has on public perceptions and sentiment in the housing market.
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Despite media portrayals of doom and gloom, the factual data indicates that home prices are no longer in decline. It’s essential not to be alarmed by sensational headlines or let them deter you from your plans. Seek reliable resources to provide accurate information about the real situation in your local area and make informed decisions accordingly.