In the final quarter of last year, there were dire predictions from some housing experts, foretelling a crash in home prices for 2023. This outlook was eagerly embraced by the media, resulting in a flurry of doomsday headlines about the housing market. Naturally, this barrage of negative coverage sowed seeds of doubt about the stability of the residential real estate sector.
If you found yourself questioning whether to put off your moving plans due to these reports, it’s important to consider the facts.
Contrary to the Headlines: Home Prices Remain Steady
Disregard the alarming headlines. The actual data paints a much more reassuring picture, with home prices displaying impressive resilience, outperforming the narrative propagated by the media. This graph, utilizing data from three reputable sources, provides a clear visual of the situation:
This visual representation underscores that prices have already bounced back, following only modest national declines. This stands in stark contrast to the crash scenario painted by many articles.
The downturn that did occur (highlighted in red) was not severe and was relatively short-lived. As aptly pointed out by Nicole Friedman, a reporter at the Wall Street Journal (WSJ):
“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 . . .”
While some media outlets made a fuss about the dip in home prices, this minor adjustment is already a thing of the past. Essentially, the data confirms that home prices are no longer on the decline—they are, in fact, on an upward trajectory.
Looking Forward: Stabilizing Home Prices
Experts concur that the growth in home prices will persist in the years ahead, returning to more typical levels for the market. This implies that we can expect continued appreciation, albeit at a slower pace compared to recent years—an encouraging development.
Certain news sources may interpret this deceleration in price growth as a sign of impending decline and craft stories that perpetuate this narrative. This trend is reflected in the Consumer Confidence Survey conducted by Fannie Mae:
While the percentage of Americans anticipating a drop in prices has been gradually diminishing this year, recent data from the Consumer Confidence Survey indicates a slight uptick in this sentiment (highlighted in red). This shift is unexpected, especially considering that home price data demonstrates a clear upward trend. It underscores the enduring influence of the media on public sentiment.
Resist the Urge to Succumb to Negative Headlines
It is crucial not to be swayed by sensational headlines and inadvertently become part of a statistic. Keep in mind, data from a range of reliable sources affirms that home prices are no longer in decline.