You might have seen some headlines about home prices dropping, but hold up – let’s take a closer look. Last year, home prices actually went up nationally. Sure, there were a couple of months when prices dipped slightly, but that’s not the whole story.

Let’s put things into perspective. In 2023, we saw a return to a more normal pattern of home price growth. Normally, home prices follow a predictable seasonal trend. Spring is when the market is hot, summer is still lively, and then things cool down a bit towards the end of the year. Prices tend to rise when demand is high, and that usually happens in the spring.

Check out this graph from Case-Shiller that goes all the way back to 1973. It shows how home prices usually go up in the spring, stay high through the summer, and then taper off towards the end of the year. The green bars represent 2023, and you can see how they match up with the blue bars, which represent the long-term trend.

So, the headlines might have focused on a couple of months where prices dropped, but that’s not the whole story. Those drops are just part of the usual seasonal cycle. When you look at the whole year, prices actually went up.

And what about this year? Well, experts expect prices to keep going up. Why? Because mortgage rates are low, which means more people are buying homes. And since there aren’t enough homes for sale, prices are going up.

So, don’t let those headlines scare you. If you have any questions about what’s happening with home prices, just reach out.