There is much discussion right now about how the price of a home is appreciating. In spite of headlines about continued price appreciation, some sellers are lowering the price of their houses. If the situation becomes confusing and difficult to understand, it can become difficult to gain a clear understanding.

It is sometimes difficult to understand the meaning of what experts are saying when they use similar words. Let us examine the differences among these terms so we can become more clear about what experts say.

• Appreciation is when home prices increase.

• Depreciation is when home prices decrease.

• Deceleration is when home prices continue to appreciate at a slower or more moderate pace.

Capitalization rates, or cap rates, are used by real estate investors to determine whether an investment property is a worthwhile buy based on its potential return on investment (ROI). A cap rate is calculated using the formula below, expressed as a percentage, since it is based on annual returns. As a result, if a property performed well or poorly for one year, the cap rate would reflect that.

You probably have many factors on your mind when considering buying a home. When deciding if you want to enter the real estate market, you weigh your needs against higher mortgage rates, current home prices, and many other factors. Some buyers may indeed wait things out, but there is a reason serious buyers are making moves right now, which is the growing number of available homes.