Will Home Prices Fall This Year? Here’s What Experts Say
If you’ve been watching the housing market lately, you’ve probably asked the same question many others are wondering: will home prices fall this year?
Whether you’re planning to buy, sell, or do both, understanding where prices are headed can help you make smart moves in today’s market.
What’s Happening with Home Prices Right Now?
Over the past decade, home prices have been on a steady climb — in fact, prices have increased for 121 consecutive months year-over-year.
According to CoreLogic,
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full-year average of 6%.”
So, why have prices been rising so fast?
It comes down to simple economics — more buyers than homes for sale. This supply-and-demand imbalance continues to put upward pressure on home prices. With housing inventory remaining low, homes on the market are still in high demand.
Where Experts Say Home Prices Are Headed
The big question is: will this trend continue?
Most housing market experts agree that a major price drop isn’t on the horizon. The market simply isn’t set up for it. Even though price growth is expected to slow down compared to the rapid pace of 2021, appreciation is still projected to remain positive.
First American puts it this way:
“While house price growth is expected to moderate from the rapid pace of 2021, strong homebuyer demand against a backdrop of historically tight inventory will likely keep appreciation positive in the coming year.”
In other words, home prices are still expected to rise — just at a more sustainable rate.
What This Means for Homebuyers and Sellers
Here’s the key takeaway: none of the major experts are forecasting home price depreciation this year.
If you’re a homeowner thinking about selling, the price gains of the past two years have likely boosted your home’s value. That’s great news! But if you plan to buy another home after you sell, waiting for prices to drop could cost you more in the long run.
That’s because both home prices and mortgage rates are expected to keep climbing. The longer you wait, the less buying power you’ll have.
According to Freddie Mac, even modest increases in mortgage rates can make a big difference in your monthly payment and overall affordability.
The Bottom Line
The housing market is showing signs of moderation, not decline. Home prices are expected to keep rising — just at a slower pace than before.
If you’ve been holding off on buying or selling because you’re waiting for a price drop, it might be time to rethink that strategy.
Connect with a trusted local real estate professional who can help you make the most of today’s market opportunities.
