As the graph shows, it’s true home price growth has moderated in recent months (shown in
green) as buyer demand has pulled back in response to higher mortgage rates. This is what
the headlines are drawing attention to today.
But what’s important to notice is the bigger, longer-term picture. While home price growth is
moderating month-over-month, the percent of appreciation year-over-year is still well above
the home price change we saw during more normal years in the market.
The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a
year was more typical (see bars for January 2019 through mid-2020). But even the latest data
for this year shows prices have still climbed by roughly 10% over last year.
What Does This Mean for Your Home’s Equity?
While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in
most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still
dramatic compared to a more normal level of appreciation (3-4%).
The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past
two years alone, you’ve likely gained a substantial amount of equity in your home as home
prices climbed. Even though home price moderation will vary by market moving forward, you
can still use the boost your equity got to help power your move.
As Mark Fleming, Chief Economist at First American, says:
“Potential home sellers gained significant amounts of equity over the pandemic, so even as
affordability-constrained buyer demand spurs price declines in some markets, potential sellers
are unlikely to lose all that they have gained.”
Bottom Line
If you have questions about home prices or how much equity you have in your current home,
let’s connect so you have an expert’s advice.
If you want a professional opinion on how to get your house ready for sale, Call Afrouz at
847-791-1264.
What Every Seller Should Know
About Home Prices
What’s Really Happening with Home Prices?
It’s possible you’ve seen news stories mentioning a drop in home values or home price
depreciation, but it’s important to remember those headlines are designed to make a big
impression in just a few words. But what headlines aren’t always great at is painting the full
picture.
While home prices are down slightly month-over-month in some markets, it’s also true that
home values are up nationally on a year-over-year basis. The graph below uses the latest
data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing
market today: