If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

 

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

While home prices are down slightly in the Austin-Round Rock market, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses data from Austin Board of REALTORS® to show the median price of homes in the Austin market from 2020 thru November 2022.

 

As the graph shows, it’s true home price growth has moderated in recent months as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market. For instance, looking at data from October 2021 and October 2022, it showed median home prices were $24k higher in 2022 than 2021. For November, we dropped just over $2k for the year. 

Nationally, home price appreciation around 3-4% a year was more typical. But even the latest data for this year shows prices have still climbed by roughly 10% over last year. 

 

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the large appreciation we saw in 2021 and early 2022, your home’s value, on average, is up. Looking at the median price of homes in the Austin-Round Rock market area, we are still higher than we were in 2020 with the prices coming down.

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost in your equity to help power your move.