7 Minute Read
Whether you’re buying, selling or staying put, there’s no doubt that home prices have a huge impact on your overall financial journey.
For example: If you’re hoping to buy this year, but you haven’t been in the market for a while, you might get overwhelmed by sticker shock. And, for current homeowners waiting to sell for the highest profit, you’ll definitely want to keep an eye on the growth of your home’s value.
Whatever your situation, we’re here to help you unpack this year’s home pricing trends so you know what to expect when it comes to your largest asset.
Home Prices: A Closer Look
First, let’s rewind a bit. According to data collected by the head honchos of the U.S. Census Bureau, the median home price in 1980 was $147,000 in today’s dollars and then $178,000 in 2000.1,2,3 That shows a growth of about 20% in 20 years.
Fast-forward to 2018, and median home prices were around $250,000 nationwide—a growth of more than 40% in less than 20 years!4 That’s double the growth of the previous 20-year period! You’ve got to love real estate.
Now for home prices today. As of May 2019, the U.S. median home price was $315,000.5 This marks an interesting point in housing pricing trends. While that price is a new record high (woo-hoo!), it’s the slowest rate of growth (6%) since 2015.
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In a nutshell, if you’re thinking of selling, odds are you’ll still make a high profit. But if you’re waiting to sell because you think your home will double in value soon, don’t count on it.
On the flip side, if you’re looking to buy, with the growth rate cooling down and the market evening out, there’s less likelihood that prices will shoot up like crazy from year to year.
Recent Home Price Trends
Okay, if you listen to any expert blab about real estate for long enough, you’ll learn that location is important. So, let’s see how current home prices change when we look at median prices based on region.6
- West: $362,400
- South: $240,000
- Northeast: $232,000
- Midwest: $189,400
Home prices definitely vary widely based on your part of the country. Homes in the Midwest were the least expensive, while those on the west coast sold for the highest prices. For example, San Jose, California currently has the most expensive housing prices with median prices over—take a deep breath—$1.1 million.7
By Age of Home
Unsurprisingly, another factor that dramatically impacts home price is whether you decide to purchase a newly built home or a previously owned one. In 2018, the median price for a new home was $329,200, while a previously owned home was $239,800.8 So, if you’re thinking, Ew! I don’t wanna buy a home that someone else lived in. I want my home to be brand-new. Just make sure you’re okay with paying the extra $90,000 for a new home.
In 2018, the median price for a new home was $329,200, while a previously owned home was $239,800.8
Most buyers don’t seem to mind living in a previously owned home if it means paying a lower price. In fact, the majority of the homes purchased last year were previously owned.
By Buyer Status
It’s also interesting to know first-time home buyers typically purchased homes that were $203,700, while repeat buyers bought $280,000 homes.9 And whether you’re married or single obviously has an influence on the price of the home you buy as well. Take a look:
- Married couples: $289,000
- Single males: $215,000
- Single females: $189,000
How does size affect price? Last year, the median price per square foot was $130.10 And, if you’re wondering what the neighbors are doing, most people purchased homes that were 1,900 square feet with three bedrooms and two bathrooms.
What Do Today’s Home Prices Mean for You?
Okay, now we know how prices change based on different factors. But what does that all mean for you?
Well, if you’re planning on buying a house, home prices might look intimidating. But, remember, just because you saw house prices that other people in the nation are buying, that doesn’t mean you should look for a house in that price range. Instead, focus on your own budget. Don’t worry about the pricing trends. A good real estate agent can help you find a home you love that’s within your budget.
If you’re not paying in cash, make sure you get a 15-year fixed-rate mortgage. And whatever you do, never buy a home that’ll cost you more than 25% of your take-home pay in monthly housing payments (including taxes, insurance and homeowners association fees).
Never buy a home that’ll cost you more than 25% of your take-home pay in monthly housing payments (including taxes, insurance and homeowners association fees).
Use our mortgage calculator to test out different home prices and see how much house you can afford.
When it comes to home prices for sellers, the main question is: How much money can I make on my home sale? Of course, the answer depends on a huge variety of factors. But, for a ballpark, recent sellers sold their homes for a median of $55,000 more than they purchased it.11 And that’s $7,500 more profit than sellers from the year before! Cha-ching!
Recent sellers sold their homes for a median of $55,000 more than they purchased it.11 And that’s $7,500 more profit than sellers from the year before!
To make sure you get what your home is worth, work with a real estate agent who’s experienced in your area. They’ll be able to do a competitive market analysis to find out what similar homes are selling for in your area so you can price your home right the first time!
Now, maybe you own a home but you aren’t planning on selling it any time soon. You’re probably curious to know how much your home value is growing or appreciating. Well, get this: People who owned their homes for four to seven years sold them last year for around $52,000–68,900 more than they purchased them. But profits only reached $35,000 for those who owned their homes for eight to 10 years—possibly because they had more value to catch up on after the 2008 housing bubble. And those who lived in their homes for 16 to 20 years before selling earned a median of $112,600.12 That’s a 66% profit!
So, if you’re thinking about downsizing in the next year or two or planning to buy that retirement dream home, you may be in good shape. And, even if you’re not, it’s likely that your “home sweet home” is going up in value.
The Best Way to Buy or Sell a Home
So, how do you know if you’re buying or selling a home for the best price? Having an experienced real estate agent is hands down the key to making a successful home transaction. You’ll benefit by working with a professional who knows the ropes and can help you keep costs down or get you the value you deserve for your home.
If you’re looking for a great agent, we can help! With our Endorsed Local Providers (ELP) program, you can find high-performing agents in your local market.
The real estate agents we recommend have deep networks in their communities, which can give you an advantage. They’ll also help you keep your other financial goals in balance.
Find a real estate pro in your area!