Heading into 2023, there was a buzz about a potential recession that could lead to a housing market downturn. Some media sources were predicting home prices might fall by 10-20%, which could have left you feeling hesitant about purchasing a home.

So, here's the deal: home prices saw a bigger increase than expected. According to Brian D. Luke, who heads Commodities at S&P Dow Jones Indices, here's what's up.

““Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”
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— Brian D. Luke, Head of Commodities at S&P Dow Jones Indices

Let's take a closer look at last year's growth by checking out the graph below. It's based on data from Freddie Mac and goes all the way back to 1980, showing how home prices have changed each year. The dotted line on the graph represents the average appreciation over the long term.

The big takeaway? Home prices almost always go up.

According to a recent article on Forbes...

““. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”
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— Forbes

Hey there! So, basically, home prices have been pretty steady since 1980, except for that big dip back in the housing market crash. But good news - things are looking up today! Unlike in 2008, there aren't as many homes up for grabs to satisfy all the eager buyers out there. Plus, homeowners have built up a lot of equity over the years, which puts them in a much better position than before. So, we're not expecting a flood of foreclosures to knock prices down anytime soon.

It's pretty impressive how home values have increased every year, except for those four highlighted in red. This is one big reason why owning a home is considered a smart financial decision. As a homeowner, you have an asset that usually gains value as time goes on. This growth in your home's value contributes to building up your overall net worth.

If you're in a good place financially and ready for the responsibilities and expenses that come with owning a home, then purchasing one could be a smart move for you.

Bottom LINE

Home prices tend to rise steadily, which can make purchasing a home a wise decision when you're prepared and financially able. I'd love to chat with you about your objectives and the current real estate options in our area. Get in touch with me!