Leave a Message

Thank you for your message. We will be in touch with you shortly.

What You Need To Know About Home Price News

May 17, 2023

Real Estate Tips

What You Need To Know About Home Price News

The National Association of Realtors (NAR) will release its latest Existing Home Sales Report tomorrow. The information it contains on home prices may cause some confusion and could even generate some troubling headlines. This all stems from the fact that NAR will report the median sales price, while other home price indices report repeat sales prices. The vast majority of the repeat sales indices show prices are starting to appreciate again. But the median price reported on Thursday may tell a different story. 

Here’s why using the median home price as a gauge of what’s happening with home values isn’t ideal right now. According to the Center for Real Estate Studies at Wichita State University:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less. While this is a good measure of the typical sale price, it is not very useful for measuring home price appreciation because it is affected by the ‘composition’ of homes that have sold.

For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

People buy homes based on their monthly mortgage payment, not the price of the house. When mortgage rates go up, they have to buy a less expensive home to keep the monthly expense affordable. More ‘less-expensive’ houses are selling right now, and that’s causing the median price to decline. But that doesn’t mean any single house lost value. 

Even NAR, an organization that reports on median prices, acknowledges there are limitations to what this type of data can show you. NAR explains:

“Changes in the composition of sales can distort median price data.”

For clarification, here’s a simple explanation of median value:

  • You have three coins in your pocket. Line them up in ascending value (lowest to highest).
  • If you have one nickel and two dimes, the median value of the coins (the middle one) in your pocket is ten cents.
  • If you have two nickels and one dime, the median value of the coins in your pocket is now five cents.
  • In both cases, a nickel is still worth five cents and a dime is still worth ten cents. The value of each coin didn’t change.

The same thing applies to today’s real estate market.

Bottom Line

Actual home values are going up in most markets. The median value reported tomorrow might tell a different story. For a more in-depth understanding of home price movements, reach out to a local real estate professional.

 

(2023, May 17). What You Need To Know About Home Price News. Keeping Current Matters. https://www.keepingcurrentmatters.com/2023/05/17/what-you-need-to-know-about-home-price-news/

Explore Our Other Blogs

Stay Updated On Our Most Recent Blog Posts

Unlock Hidden Value Why Hyperlocal Expertise in Evergreen & Silver Creek Transforms Your San Jose Real Estate Experience

Real Estate

Unlock Hidden Value Why Hyperlocal Expertise in Evergreen & Silver Creek Transforms Your San Jose Real Estate Experience

Brian Ng  |  June 20, 2025

Unlock Hidden Value Why Hyperlocal Expertise in Evergreen & Silver Creek Transforms Your San Jose Real Estate Experience
From Hesitation to Home Run: Your Step-by-Step San Jose Real Estate Roadmap for Evergreen & Silver Creek

Real Estate

From Hesitation to Home Run: Your Step-by-Step San Jose Real Estate Roadmap for Evergreen & Silver Creek

Thao Dang Pham  |  June 19, 2025

From Hesitation to Home Run: Your Step-by-Step San Jose Real Estate Roadmap for Evergreen & Silver Creek
Beware These Red Flags: Picking a San Jose Realtor You Can Truly Trust with Your Evergreen & Silver Creek Portfolio

Real Estate

Beware These Red Flags: Picking a San Jose Realtor You Can Truly Trust with Your Evergreen & Silver Creek Portfolio

Brian Ng  |  June 18, 2025

Beware These Red Flags: Picking a San Jose Realtor You Can Truly Trust with Your Evergreen & Silver Creek Portfolio
Overwhelmed by San Jose Listings? How Block Change RE Sharpens Your Evergreen & Silver Creek Vision

Buyer's Real Estate Tips

Overwhelmed by San Jose Listings? How Block Change RE Sharpens Your Evergreen & Silver Creek Vision

Thao Dang Pham  |  June 17, 2025

Overwhelmed by San Jose Listings? How Block Change RE Sharpens Your Evergreen & Silver Creek Vision
Trust Your Instincts: How to Spot a Truly Trustworthy Realtor for Your San Jose, Silver Creek & Evergreen Assets

Seller's Real Estate Tips

Trust Your Instincts: How to Spot a Truly Trustworthy Realtor for Your San Jose, Silver Creek & Evergreen Assets

Brian Ng  |  June 16, 2025

Trust Your Instincts: How to Spot a Truly Trustworthy Realtor for Your San Jose, Silver Creek & Evergreen Assets
Is Your San Jose Property an Asset or a Liability? A Realtor’s Portfolio Review for Evergreen & Silver Creek

Real Estate

Is Your San Jose Property an Asset or a Liability? A Realtor’s Portfolio Review for Evergreen & Silver Creek

Brian Ng  |  June 13, 2025

Is Your San Jose Property an Asset or a Liability? A Realtor’s Portfolio Review for Evergreen & Silver Creek

Let's Talk

You’ve got questions and we can’t wait to answer them.

FOLLOW US ON INSTAGRAM