If, at any time over the past couple of years, you’ve considered buying or selling a home, you know all too well the rollercoaster of emotions changing home prices can bring.

Doubts, frustration, and anxiety are probably just a few of the emotions you’ve experienced.

These emotions have caused many to put their real estate plans on hold in the hope that home prices drop. While Frisco home prices did fall in the second half of 2022, the market certainly didn’t crash and home prices are actually on the rise again.

Here’s a look at how month-over-month home prices have changed nationally from several different sources:

From the graph above you can see that home prices were rising rapidly in the first half of 2022 (the green bars on the left-hand side of the graph). That is when multiple offers and bidding wars dominated the housing market.

Those rapid and unsustainable price increases are what led many to predict the housing market was about to crash.

While the housing market didn’t crash, it did correct in the second half of the year (shown in red), but those price declines were short-lived. Nevertheless, lots of media reports focused on those declines which created quite a lot of fear and uncertainty.

By comparison, here’s a graph showing the change in Frisco home prices since the beginning of 2022;

Since May 2023, home prices in Frisco have been steadily climbing again and there is currently nothing in the leading indicators to suggest home prices will fall in the coming months.

Orphe Divounhuy, Senior Economist at Zillow, explains changing home prices over the past 12 months this way:

“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022 - January 2023…..That downturn has proven to be short lived as the housing market has rebounded impressively so far in 2023…”

Home price appreciation normally slows this time of year due to seasonality, but that is not to be confused with declining home prices. The latest data from the Frisco Housing Market shows that current new list prices are holding steady.

Why Do Frisco Home Prices Keep Rising

One reason why home prices here in Frisco, and across the country, are climbing is because there are still not enough homes for sale for the people that want to buy.

Even though home buyer demand has declined due to high mortgage rates, the supply of homes for sale has continued to fall due to the mortgage rate lock-in effect. Existing homeowners who would consider selling are reluctant to give up their current low mortgage tate to take on a much higher one on their next home.

Higher mortgage rates are impacting both buyers and sellers and essentially freezing the housing market.

As Freddie Mac states:

“While rising interest rates have reduced affordability - and therefore demand - they have also reduced supply through the mortgage rate lock-in effect. Overall. it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase…”

Here’s a graph showing the change in inventory (number of homes for sale) in Frisco over the past few years:

Check out my Frisco Market Report for all the latest Frisco housing data.

How Does This Impact You

Buyers: If you’ve been delaying buying a home for fear that values might drop, knowing that home prices have bottomed out and are starting to rise again should make you feel better. Buying a home provides the opportunity to own something that will continue to build wealth over time. If mortgage rates are a concern, the current market does provide a unique opportunity to obtain permanent, below-market, mortgage rates. Schedule a call with me to learn more.

Sellers: If you’ve been holding off selling your home due to declining home prices and the fear of losing your low mortgage rate, the limited number of homes on the market makes this an advantageous time to sell and take advantage of the special financing offers currently available, especially if considering a new construction home.

Click Here to find out how much equity you have in your current home.

Bottom Line

Now might not be the best time to consider buying or selling a home, but each person’s situation differs. Let’s connect to discuss your situation in more detail and put together the plan that’s best for you and your family. Schedule a call today.

New homebuilders have the most available inventory and are offering aggressive financing incentives currently. Here are a few of the new construction homes currently available: