Understanding Home Price Growth from the 1990s to the 2020s

The 2020s housing market continues to defy expectations, especially in the Hattiesburg real estate scene. Local and national home prices have surged over the past four years, surpassing the growth seen in entire previous decades. This rapid climb has many wondering – is this a sustainable trend, or are we due for a correction?

In today's blog post, we'll dive into historical data and explore what these trends mean for buying and selling real estate in the Hattiesburg housing market and nationally

2020s Home Price Growth: Surpassing Expectations

National home price growth in the early 2020s has already outpaced the total growth seen in both the 1990s and 2010s. According to ResiClub's analysis of the latest data, U.S. home prices have increased by 47.1% through the first 50 months of this decade. 

Even the past year alone has seen considerable growth: U.S. home prices increased 6.4% from February 2023 to February 2024.

Locally in the Hattiesburg Area MLS, we are seeing a slightly different story. In February 2023, the median home price was $220,000.  Fast forward a year, and the median home price was still $220,000 resulting in no change year-over-year. 

Now if I break Forrest County out, in Feb 2023 median sales price was $178,000 but in Feb 2024 it increased $198,500.   Lamar County had a more modest increase.  In Feb 2023 median sales price was $260,950 and that increased to $268,750 in February 2024.

So, what does this mean for the rest of the decade? The only way to understand what could happen is to understand the historical data

Historical Comparisons

The 2020s increase in home prices can bring up a lot of fears (especially for those who see all the doom-and-gloom headlines!). At RE/MAX Real Estate Partners we often hear questions like: Does this mean a market crash is coming? Is this a bad time to buy? Should I just wait for prices to come down? Or the rates to come down? 

Historically, here’s what we’ve seen: a consistent upward trend in home price growth every decade.

Take a look at the national numbers:

• 1990s Decade: +30.1% increase in home price growth

• 2000s Decade: +47.3% increase

• 2010s Decade: +44.7% increase

• 2020s Decade: +47.1% increase (in just the first 50 months)

In short, the 2020s market (so far) is an outlier, as we’re seeing higher overall price inflation in the current decade compared to similar points in previous decades. However, we also know that long-term, home price appreciation is expected to continue. 

What Does This Mean for You?

The historical data suggests a few key takeaways:

• Long-term Investment: Owning a home is not like playing the stock market; it's where you live and build your life. When buying your primary residence, aim to stay for at least 5 to 10 years. Over the decades, real estate has consistently proven its value as a long-term investment. Even during downturns, the market tends to recover and grow, reinforcing its stability. are generally followed by recovery and growth, reinforcing the asset's stability.

• Housing Market Dynamics: Buyers and sellers must stay informed about local market conditions, as national trends can mask regional variations. For instance, while some markets are experiencing an increase in housing inventory, others remain at record lows. Understanding the unique dynamics of the Hattiesburg real estate market is crucial for making informed decisions about buying or selling a home.

• Future Outlook: In my 28 years in Hattiesburg real estate, I've never seen a significant long-term property value decrease. The market has usually recovered quickly, and with strategic investments in Hattiesburg real estate, you can still yield substantial returns. However, as with any major purchase, careful analysis remains essential to make the most informed decision. 

Interested in current data for Hattiesburg Area? Connect with me here [email protected]

Final Thoughts…

We know the current market may seem daunting, but here’s the upside: history suggests that real estate remains a strong long-term investment. In my 28 years in real estate in Hattiesburg, I’ve watched the market shift several times, but I’ve never seen a real drastic reduction in value that wasn’t caused by an artificial inflation of a natural disaster. And the market quickly caught up with those prices. 

With national trends masking regional variations, it’s critical to stay informed about your local market. After all, understanding local dynamics—including prime locations, market data and up-and-coming neighborhoods—is the key to leveraging the potential of real estate for long-term gains.