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 Pace

At 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):

A bar chart titled 'Home Prices Are Growing at a More Normal Pace' illustrates the year-over-year change in home prices for a 20-city composite index. The vertical axis represents the percentage change in home prices, ranging from -1% to over 20%. The horizontal axis shows dates from January 2019 to November 2024.The chart displays an increase in home prices starting in mid-2020, peaking in early 2022 at over 20%, followed by a decline through 2023. A small negative dip is visible in mid-2023 before price growth resumes. By late 2024, home price appreciation appears to be stabilizing at a more moderate level. The source is cited as Case-Shiller.

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 Market

While 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):

A bar chart titled 'Home Price Appreciation Varies Regionally' illustrates the month-over-month percent change in home values (seasonally adjusted) for November 2024.The U.S. overall shows a 0.3% increase.
The Pacific region increased by 0.4%.
The Mountain region saw a 0.7% rise.
The West North Central region had the highest gain at 0.9%.
The West South Central region declined by -0.4%.
The East North Central region remained unchanged at 0.0%.
The East South Central region experienced the largest decrease at -0.6%.
The New England region saw a 0.9% increase.
The Middle Atlantic region had a 0.2% increase.
The South Atlantic region recorded a 0.5% increase.
The chart uses green bars to represent positive price changes, red bars for negative changes, and a blue bar for the national average. The source is cited as FHFA.

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 Line

Home 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? Let’s talk about it.