If you've ever thought about buying your own place or selling your current house to move up, you know how much of an emotional rollercoaster the fluctuating home prices can be. It's a story of chasing financial dreams, dealing with doubts, and even a little bit of anxiety that so many people can relate to.

If you've been holding off on moving because you're concerned about a possible drop in home prices, let me assure you that you've got nothing to worry about. In fact, it's quite the opposite! According to reliable national data from various sources, home prices have been consistently on the rise throughout this year. So, if you were hoping for a decrease, it's time to adjust those expectations. The market is showing a positive trend, my friend!

Basically, this graph here is telling us something interesting. In the first half of 2022, the prices of homes went up a lot (you can see those green bars on the left side of the graphs above). And let me tell you, those increases were really something, but they couldn't last forever.

So, towards the end of the year, the prices kind of went down a little (you can see it in red). But don't worry, those decreases were small and didn't last very long. However, the media made a big deal out of those drops in their headlines, which made a lot of people feel scared and unsure about things.

I've got some more info to add that hasn't been fully discussed yet. In 2023, prices are going up again, but this time it's happening at a more normal rate (check out the green bars on the right side of the graphs above). Considering the excessive price increases and subsequent corrections we experienced in 2022, it's actually good news for the housing market that all three reports indicate a more typical level of price appreciation this year.

““The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .””

— Orphe Divounguy, Senior Economist at Zillow

Just wanted to give you a heads up about something. As we enter this time of year, home prices usually start to increase at a slower pace. Now, there's a chance that the media might mix things up a bit and make it sound like home prices are actually dropping. But don't let that fool you! When we talk about slower price growth, it still means the prices are going up, just not as fast as before. So, it's all good!

Why Are Home Prices Increasing Now?

Home prices are going up because there are still not enough homes for sale to meet the demand from buyers.

Here's the deal with higher mortgage rates - they can actually dampen buyer demand, but at the same time, they also lead to a decrease in the number of homes available on the market. You see, when rates go up, some homeowners are hesitant to sell because they don't want to lose their current low mortgage rate. They'd rather hold on to it instead of taking on a higher rate for their next home. It's like they're locking in the lower rate for as long as they can.

The thing is, when mortgage rates go up, it affects both folks who want to buy a house and those who want to sell. And because there are more people looking to buy homes than there are houses up for sale, the whole "supply and demand" thing gets all out of whack. And you know what happens when there's more demand than supply? Prices just keep on going up! It's crazy, I know.

““While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”
”

— Freddie Mac

Here’s How This Impacts You

• Buyers: If you were hesitant to buy a home because you thought its value might decrease, don't worry. Home prices have gone up again, so now is a good time to buy. Owning a home is a great investment that typically becomes more valuable over time.

• Sellers: If you've been hesitant to sell your house because you're concerned about how the changing home prices will affect its value, it might be a good idea to team up with a real estate agent and list your house. Now you don't have to wait any longer because the latest data shows that home prices are in your favor.

Bottom Line

Hey, if you've been hesitant to move because you're worried about home prices dropping, I have some good news for you! The latest data shows that home prices are actually increasing all over the country. Let's get in touch so I can give you more details about how home prices are changing in our local area.