Experts in the real estate industry use a number of terms when they talk about the latest home price trends. Here’s a look at a few terms you may hear.
Appreciation is when home prices increase, depreciation is when home prices decrease, deceleration is when home prices continue to appreciate, just at a slower, or more moderate pace. For starters you’ve probably heard about how home prices have skyrocketed over the past two years. During the pandemic, prices rose so dramatically because inventory was historically low. At the same time, buyer demand reached a frenzy. That imbalance put record-breaking upward pressure on home prices, but homes were appreciating long before that.
You might be surprised to learn that home prices have climbed for 126 consecutive months according to the federal Housing Finance Agency. Historically, 3.8 percent appreciation is the norm, so the 15 appreciation that the market saw in 2021 was an anomaly. While this is helpful context if you’re a homeowner in today’s market, you probably want to know what’s going to happen with home prices moving forward. Will they continue that same growth path? Or will home prices fall? Experts agree that nationally what we’re seeing today is deceleration. While moderating, home prices are still far above the norm, in fact we’d have to see a lot more deceleration to even fall in line with the more typical rates of home price growth that we’ve seen historically, which is 3.8 percent.
The big takeaway is home prices haven’t fallen or depreciated nationwide, they’re just decelerating. While some unique and overheated markets may see declines, nationally home prices are forecast to appreciate. If you’re ready to sell, let’s connect so that you’ll have a full picture of what’s happening with home prices in our local market, and what that means for you! Give us a call today at 864-895-9791!