What’s Actually Happening with Home Prices Today?
If you’re wondering about home prices, you’re not alone. With headlines saying both that prices are appreciating and that some sellers are reducing their asking price, it can feel confusing to try and understand what’s really going on in the market. Part of the challenge is that different experts may use similar sounding terms but mean different things by them. To help clarify what’s actually happening today, let’s break down the differences among some of these key terms:
- Appreciation is when the value of your home goes up.
- Depreciation is when the value of your home decreases.
- Deceleration is continuing appreciation at a slower rate.
“Annual home price growth dropped by nearly two percentage points . . . – the greatest single-month slowdown on record since at least the early 1970s. . . While June’s slowdown was record-breaking, home price growth would need to decelerate at this pace for six more months to drive annual appreciation back to 5%, a rate more in line with long-run averages.”Basically, this means, while moderating, home prices are still far above the norm, and we’d have to see a lot more deceleration to even fall in line with more typical rates of home price growth. That’s still not home price depreciation. The big takeaway is home prices haven’t fallen or depreciated nationwide, they’re just decelerating or moderating. While some unique and overheated markets may see declines, nationally, home prices are forecast to appreciate. And when we look at the country as a whole, none of the experts project home prices will net depreciate or fall. They’re all projecting ongoing appreciation.