Home Prices Finally Drop

Remember when it felt like home prices would just keep climbing forever, like some unstoppable roller coaster that forgot how to come down? Well, grab your seatbelt, because we finally hit a turning point.

For the first time in over two years, home prices across the country have gone negative compared to last year. According to recent data from real estate analytics firm Parcl Labs, national home prices have dropped slightly on a year-over-year basis, and they've fallen 1.4% just in the last three months alone.

So what's actually happening?

Think of it like this: imagine you're at a store where everything suddenly got marked up 30% during the pandemic. You desperately needed that item, so you paid the inflated price. But now, the store is finally—finally—bringing prices back down to Earth. Not dramatically, but enough that you notice.

Home prices haven't crashed. We're not talking about a repeat of 2008 when prices dropped 27% from peak to trough. Instead, what we're seeing is more like a gentle correction—a market catching its breath after years of sprint-level growth.

Why are prices coming down?

Remember when mortgage rates were sitting pretty at around 4% back in early 2022? Then the Federal Reserve stepped in to fight inflation, and rates shot up to over 7% within just over a year. That's like going from paying $300 for something to suddenly paying $500 for the exact same thing. People naturally said, "Uh, no thanks."

With fewer buyers able to afford homes at those rates, sellers had to get realistic about pricing. It's basic supply and demand—when fewer people can buy, prices have to adjust.

What does this mean if you're a homeowner?

First, don't panic. If you bought your home a few years ago, you've still likely built up substantial equity. And if you have one of those amazing low mortgage rates from 2020-2021? You're sitting pretty. This isn't 2008 where people were underwater on their mortgages left and right.

Think of it this way: your home's value might be slightly down from its peak, but it's probably still worth way more than what you paid for it.

What if you're trying to buy?

This is actually good news for you. After years of watching prices climb while your dream of homeownership felt further away, you're finally getting a break. Prices are softening, inventory is increasing, and while mortgage rates are still higher than we'd like (hovering in the low 6% range), they're slowly trending in the right direction.

It's like waiting for a crowded restaurant table—you've been on the waitlist forever, but now some people are leaving and your turn is coming up.

The bottom line

The housing market is finding its balance again. We're not in crisis mode; we're in correction mode. For current homeowners, your equity is probably still solid. For hopeful buyers, this is the breathing room you've been waiting for.

Housing markets don't change overnight, but they do change. And after two years of frustration, this shift is a welcome sign that things are heading in a more sustainable direction. Whether you're buying, selling, or just staying put, this is the kind of market adjustment that helps everyone in the long run.