The Five-Year Rule for Home Price Perspective

If you’ve seen headlines saying home prices are starting to dip, you might be second guessing your plans. But before you make any big decisions, here’s the truth behind the numbers — and why this isn’t cause for panic.

🏡 A Few Price Drops ≠ A Crash

Yes, some markets are seeing slight declines, but the key word here is slight. The average dip in those areas is around -2.9% since April 2024. And that’s a far cry from what happened during the 2008 housing crash.

📉 Reminder: 2008 was the exception — not the rule.
Back then, we had loose lending practices, zero equity, and way too many homes on the market. Today’s housing market is much more stable.

📆 The Five-Year Rule

If you’re planning to own your home for at least five years, short-term dips shouldn’t worry you.

Real estate expert Lance Lambert explains:

“There’s the ‘five-year rule of thumb’ in real estate — which suggests that most buyers can buffer themselves from mild short-term declines if they plan to own a property for at least that amount of time.”

Why? Because over time, home values tend to rise — even if they hit a small bump along the way.

🔎 The Long-Term View Is Still Strong

Let’s zoom out:

📈 Over the last five years, home prices have risen a staggering 55% nationwide (source: FHFA).

📍 Every single state has seen price growth during that time.

So even if prices have softened a little in some areas recently, most homeowners are still well ahead — especially those who bought 3–5 years ago.

🧠 The Big Picture

The headlines love to focus on short-term shifts. But most homeowners aren’t buying or selling for just the next few months — you’re making a move for the next 5, 10, even 15 years.

And that’s exactly why the five-year rule matters so much.

🏁 Bottom Line

Yes, prices can dip here and there. But history proves home values almost always go up over time. So, whether you’re buying or selling, keep your eye on the long-term and don’t let today’s headlines cloud tomorrow’s opportunity.

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