$\"The$ \n

Headlines are saying home prices are starting to dip in some markets. And if you\u2019re beginning to second guess your plans based on what you\u2019re hearing in the media, here\u2019s what you need to know.<\/p>\n

It\u2019s true that a few metros are seeing slight price drops. But don\u2019t let that overshadow this simple truth. Home values almost always <\/strong>go up<\/strong><\/a> over time <\/strong>(see graph below<\/em>):<\/p>\n

$\"a$ <\/a>While everyone remembers what happened around the housing crash of 2008, that was the exception \u2013 not the rule. It hadn\u2019t happened before, and hasn\u2019t since. There were many market dynamics that were drastically different back then, too. From relaxed lending standards to a lack of homeowner equity, and even a large oversupply of homes, it was very different from where the national housing market is today. So, every headline about prices slowing down, normalizing, or even dipping doesn\u2019t need to trigger fear that another big crash is coming.<\/p>\n

Here\u2019s something that explains why short-term dips usually aren\u2019t a long-term deal-breaker.<\/p>\n

What\u2019s the Five-Year Rule?<\/strong><\/h4>\n
In real estate, you might hear talk about the five-year rule. The idea is that if you plan to own your home for at least five years, short-term dips in prices usually don\u2019t hurt you much. That\u2019s because home values almost always go up in the long run. Even if prices drop a bit for a year or two, they tend to bounce back (and then some) over time.<\/p>\n
Take it from Lance Lambert, Co-Founder of ResiClub<\/em>:<\/p>\n
\u201c. . . there\u2019s the \u2018five-year rule of thumb\u2019 in real estate\u2014which suggests that most buyers can buffer themselves from mild short-term declines if they plan to own a property for at least that amount of time.\u201d<\/em><\/p><\/blockquote>\n
What\u2019s Happening in Today\u2019s Market?<\/strong><\/h4>\n
Here\u2019s something else to put your mind at ease. Right now, most housing markets are still seeing home prices rise \u2013 just not as fast as they were a few years ago.<\/p>\n
But in the major metros<\/a> where prices are starting to cool off a little (the red bars in the graph below<\/em>), the average drop is only about -2.9% since April 2024. That\u2019s not a major decline like we saw back in 2008.<\/p>\n
And when you look at the graph below, it\u2019s clear that prices in most of those markets are up significantly compared to where they were five years ago (the blue bars<\/em>). So, those homeowners are still ahead if they\u2019ve been in their house for a few years or more (see graph below<\/em>):<\/p>\n
The Big Picture<\/strong><\/h4>\nOver the past 5 years, home prices have risen a staggering 55%<\/a>, according to the Federal Housing Finance Agency<\/em> (FHFA). So, a small short-term dip isn\u2019t a significant loss. Even if your city is one where they\u2019re down 2% or so, you\u2019re still up far more than that.<\/p>\n
And if you break those 5-year gains down even further, using data<\/a> from the FHFA, you\u2019ll see home values are up in every single state over the last five years (see map below<\/em>):<\/p>\n
$\"a$ <\/a>That\u2019s why it\u2019s important not to stress too much about what\u2019s happening this month, or even this year. If you\u2019re in it for the long haul (and most homeowners are) your home is likely to grow in value over time.<\/p>\n
Bottom Line<\/h3>\n
Yes, prices can shift in the short term. But history shows that home values almost always go up over five years. So, whether you\u2019re thinking of buying or selling, remember the five-year rule, and take comfort in the long view.<\/p>\n
When you think about where you want to be in five years, how does owning a home fit into that picture?<\/strong><\/p>\n
Connect with an agent to discuss how to get there.<\/p>\n<\/div>\n\n<\/body>","protected":false},"excerpt":{"rendered":"
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