Home Price Growth Is Moderating – Here’s Why That’s Good for You

Over the past few years, home prices skyrocketed. That’s been frustrating for buyers, leaving many wondering if they’d ever get a shot at owning a home. But here’s some welcome news: that whirlwind pace of home price growth is slowing down.Home Prices Are Rising at a Healthy PaceAt the national level, home prices are still going up, but at a much more moderate, normal pace. For example, in November, the year-over-year increase in home prices was just 3.8% nationally, according to Case-Shiller. That’s a far cry from the double-digit spikes that occurred in 2021 and 2022 (see graph below):This more normal home price growth might make buying a home feel more attainable for many buyers. You won’t face the same sticker shock or rapid price jumps that made it hard to plan your purchase just a few years ago.At the same time, steady growth means the home you buy today will likely appreciate in value over time.Prices Vary from Market to MarketWhile the national story is one of moderate price growth, it’s important to remember that all real estate is local. Some markets are seeing stronger growth, while others are cooling off or even seeing slight declines. As Selma Hepp, Chief Economist at CoreLogic, notes:“Regionally, variations persist, as some affordable areas – including smaller metros in the Midwest — remain in high demand and continue to see upward home price pressures.”Meanwhile, other regions saw slight month-over-month declines in November, according to Federal Housing Finance Agency (FHFA) data (see graph below):What does this mean for you? It’s crucial to understand what’s happening in your local market. A national average can’t tell the whole story. That’s where working with a local real estate agent can really help. They have the tools and expertise to give you the full picture of what’s happening in your area and how to plan for that in your move.Bottom LineHome prices are growing at a more manageable pace, and working with a local real estate agent can help you navigate the ups and downs of your specific market.How have changing home prices impacted your plans to buy? 

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Buyer Bright Spot: There Are More Homes on the Market

The past few years have been challenging for homebuyers, especially with higher home prices and mortgage rates. And if you’re trying to buy a home, it’s easy to worry you won’t be able to find something in your budget.But here’s what you need to know. The number of homes for sale has grown a whole lot lately and that’s true for both existing (previously lived-in) and newly built homes. Here’s a look at those two bright spots for buyers right now and why they may make it a bit easier to find the home you’re been looking for.1. There Are 22% More Existing Homes for Sale Data from Realtor.com says the number of existing homes for sale improved by an impressive 22% in 2024. And experts say your pool of options is expected to get even better this year. Forecasts show inventory is projected to grow another 11-15% by the end of this year (see graph below):Here’s why this is so good for your search. If you haven’t seen a house with all the features you need, just know that, as the number of homes for sale grows, you’ll have more options to choose from. That means a better chance of finding a home that checks all your boxes. As Ralph McLaughlin, Senior Economist at Realtor.com, says:“It could be a particularly good time to get out into the market . . . you're going to have more choice. And that's not something that buyers have really had much over the past several years.”2. There Are More Newly Built Homes on the MarketAccording to data from the Census and the National Association of Realtors (NAR), 31.1%, or roughly 1 in 3, homes on the market right now are newly built homes. That’s more than the norm (see charts below). But don't worry, that's not because builders are overdoing it – it’s just that they’re trying to catch up after years of underbuilding.And the best part is, since builders have been focusing on smaller homes with lower price points, you may actually find out new builds are less expensive than you’d expect. So, while a lot of people write off new construction because it’s easy to assume the costs are way higher, lately, that price gap isn’t as big as you’d think. As CNET says:“If you live in an area where there's a lot of new construction happening . . . you might be able to purchase a new house for a price similar to or even less than a pre-owned one.”If you haven’t been able to find a home that’s in your budget, it’s time to ask your agent about new builds. If you don’t, you may have been cutting your pool of options by about a third.Bottom LineMore choices could be the key to unlocking your homebuying goals in 2025. Talk to a local agent if you want to see what’s available in your area.What features are you looking for in your next home? Let an agent know so they can put together a list of homes you’d love.

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2025 Housing Market Forecasts

Some HighlightsWondering what to expect when you buy or sell a home this year? Here’s what the experts say lies ahead.Mortgage rates are projected to come down slightly. Home prices are forecast to rise in most areas. And, there will be more homes available for sale.Want to know more about what this could mean for your plans this year? Connect with a local agent to discuss your 2025 goals. 

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