Weekly Special | July 29, 2024

Is It “Now Or Never” For Homebuyers?

There are many calling for home prices to crash due to their rapid recent ascent. After all, home affordability is approaching an all-time low.

While I certainly understand the frustration, I’m more concerned that prices will run significantly higher.

Today’s graph plots more than 134 years of the median home price in the United States, and the table within the graph highlight all the years that the median home price has moved backward.

Roughly 83% of all years showed appreciation, while just 17% reported depreciation, and most of those centered on three key historical events: The Great Depression, World War II, and the Great Recession.

According to the Federal Reserve Bank of St. Louis, the median home price in the U.S. has increased by about 1,070% since 1963.

That’s an average annual increase of about 5.4%. Now, this doesn’t mean every year saw a 5.4% increase. Some years were higher, some were lower, and some even saw declines. But over the long term, the trend has been upward.

If you are struggling to enter the housing market, I encourage you to sit down with an expert to devise a plan to get you started. My greatest concern is that our elected officials are not really paying attention to housing and it is going to get away from us.

Remember, home prices crash due to supply far out-racing demand. We have not been building homes at historically “normal” rates for the past 16 years, and the vacuum has protected home prices and likely will for years to come.

The original one-page Weekly Special PDF is still available.