What's Really Happening with Home Prices?
webadmin • October 10, 2024
What's Really Happening with Home Prices?
Lately, you might have seen some news headlines suggesting that the "median" asking price of homes is falling, which can make it seem like homes are getting cheaper overall. However, this isn't the whole story. It's crucial to dig a little deeper to understand why, despite these headlines, the value of homes across the country is actually increasing.
Understanding Median Prices vs. Home Values
First, let's clarify what median price means. If you line up all the homes for sale from the cheapest to the most expensive, the median price is the one right in the middle. This number can change based on what kinds of homes are selling.
Imagine you have three coins in your pocket—a nickel, and two dimes. You line them up by value from low to high. The median, the middle one, is 10 cents. If you have two nickels and one dime, the median is now five cents. In both cases, the value of each coin didn’t change, just like the actual value of houses doesn't necessarily change even if the median price does.
This example shows how more smaller, affordable homes being sold can pull down the median price, but it doesn’t mean that the value of the homes themselves is decreasing.
Price Per Square Foot: A More Accurate Measure
A better way to understand home values is to look at the price per square foot. This measure shows you how much house you're getting for your money. It's a crucial indicator because it factors in the size of the home, helping to show the real value better than just the selling price.
Recent data indicates that the price per square foot is still on the rise nationally, meaning that the value per area of a home is increasing. Ralph McLaughlin, Senior Economist at Realtor.com, supports this view: “When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.”
This means that while smaller homes are affecting the median price, the average home’s value is still rising.
What This Means for You
The Federal Housing Finance Agency (FHFA) also affirms that home values are robust, stating: “Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.”It’s easy to get caught up in headlines, but it’s important to understand the details behind the numbers. Whether you are buying or selling a home, or just interested in the market, you should focus on more reliable indicators like the price per square foot.
Conclusion
In summary, while median prices can give a quick snapshot of the market, they don't always tell the whole story. For a more accurate picture of what's happening with home values, look at the price per square foot. This measure helps you understand how much real value you are getting for your money. Understanding these concepts can help you make more informed decisions in the real estate market, ensuring that you're not misled by simplistic interpretations of complex data. Blog info and graphics pulled from Keeping Current Matters.
Here at Luminate Home Loans, we’re always looking for ways to offer more value to our clients and partners. That’s why we’re thrilled to announce that we’re now a wholly owned subsidiary of Luminate Bank®—and soon, we’ll officially transition under the Luminate Bank® name.
For years, homebuyers have been hoping for a return to the ultra-low mortgage rates seen during the pandemic. But as we move through 2025, it’s becoming increasingly clear that today’s rates—hovering between 6% and 8%—aren’t going anywhere.
Luminate Bank® Welcomes Josh Eifert as Chief Financial Officer, Honoring Legacy of Dave Turk [Minneapolis, Minn.] – [2/4/2025] – Luminate Bank® is proud to announce the appointment of Josh Eifert as its new Chief Financial Officer, succeeding Dave Turk, who has played a pivotal role in shaping the company's strong financial foundation. Josh brings a wealth of experience and strategic vision to Luminate Bank, with 26 years in the banking industry. Most recently, Josh served as CFO at Tradition Capital Bank in Edina, Minnesota, where he led the financial strategy during its remarkable growth from $300 million to more than $2.5 billion in total assets. Before his tenure as CFO, Josh contributed to Tradition Capital Bank in other key financial roles. He began his career with Norwest and Wells Fargo Banks, gaining extensive expertise in financial and operational capacities. Luminate Bank's leadership transition reflects the company's thoughtful succession planning, ensuring its financial strategies remain robust and forward focused. Under the leadership of Dave Turk, Luminate Bank has built an exceptional financial infrastructure, delivering consistent results and creating a foundation that positions the company for continued success. Luminate Bank's CEO, Marc Campbell, shared his confidence in the appointment: "Josh not only brings exceptional financial acumen and strategic insight to Luminate Bank, but he also embodies the principles that define our organization: integrity, innovation, and a steadfast commitment to excellence," Luminate Bank's CEO, Marc Campbell, shared with confidence. "His leadership will ensure our financial strategies succeed and inspire confidence across all who depend on us." "I am honored to join Luminate Bank at such an exciting time. The company's remarkable history of financial excellence and its forward-thinking approach align perfectly with my values and vision," stated Josh Eifert. "I look forward to collaborating with the talented leadership team to build on this strong foundation and drive continued success for our customers, employees, and stakeholders." Josh graduated from the University of Minnesota with a degree in finance and completed the Graduate School of Banking at Colorado. CEO Marc Campbell expressed gratitude for retiring CFO Dave Turk's contributions, saying, "Dave has been instrumental in positioning Luminate as a financial leader. His dedication, insight, and stewardship will always be a part of our company's legacy." Josh Eifert will officially assume his role on February 18, 2025. About Luminate Bank® At Luminate Bank, We Open Doors—empowering individuals and families to achieve their financial dreams through personalized service and innovative digital solutions. As a nationwide bank headquartered in Minneapolis, Minnesota, we are committed to helping our clients meet their financial goals with a blend of modern technology, traditional values, and the trusted guidance of experienced professionals. Known for our exceptional commitment to customers, we take pride in delivering a seamless, supportive experience for every step of the journey. Our dedicated mortgage division has branches and a team of loan originators across the US, making expert home financing solutions accessible to communities nationwide. Luminate Bank is committed to safeguarding your money and accounts with FDIC insurance coverage up to applicable limits. Learn more about how we can open doors for you at www.luminate.bank , follow us on Instagram, LinkedIn, and Facebook, or call (952) 939-7200. For media inquiries, please contact: Debbie Schwake, CMO debbie.schwake@luminate.bank
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