If you’ve been keeping up with the news lately, you might be feeling uncertain about the direction of home prices and worrying if a downward spiral is imminent. However, it’s important to note that the headlines are painting a more negative picture than what the latest data actually reveals. Contrary to the doom and gloom, home prices are not plummeting. In fact, the national data tells a different and more positive story. While local market trends may still vary, let’s examine the broader perspective.
Taking a year-over-year view, home prices have remained in positive territory, albeit with slower appreciation compared to the peak of the pandemic. To gain more insight, we need to delve into monthly data.
Analyzing recent reports from multiple sources, the graphs illustrate that the worst home price declines are already in the past, and prices are gradually rebounding on a national level.
These detailed monthly graphs reveal that the housing market has experienced two distinct halves over the past year. In the first half of 2022, home prices were steadily climbing, reaching their peak in June. However, in July, prices began to decline (as indicated by the red lines in the graphs). By August or September, the downward trend started to stabilize. As we examine the most recent data for early 2023, the graphs also demonstrate a recent rebound in momentum, with prices starting to rise again. Notably, as we enter the busier spring season, monthly changes in home prices are gaining traction.
While a couple of months don’t establish a solid trend, the fact that all three reports indicate price stabilization is an encouraging sign for the housing market. The month-over-month data suggests a clear consensus, albeit still in the early stages, that a national shift is underway. In essence, home prices are on the upswing.
Andy Walden, Vice President of Enterprise Research at Black Knight, highlights this positive trend:
“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”
Selma Hepp, Chief Economist at CoreLogic, attributes this positive turn to the limited supply of homes for sale:
“…prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains… The monthly rebound in home prices underscores the lack of inventory in this housing cycle.”
What Does This Mean for You?
Sellers: If you’ve been hesitant to sell due to concerns about declining home prices and the potential impact on your home’s value, it’s time to reconsider. The latest data indicates a shift in your favor, and partnering with a real estate agent to list your house could be the right move for you.
Buyers: If you’ve been waiting on the sidelines, fearing that purchasing a home would lead to depreciation, you can now breathe a sigh of relief. The current upward trend in prices offers reassurance, and buying now provides the opportunity to own an asset that historically appreciates over time.
Bottom Line
If you postponed your plans to move because of worries about falling home prices, rest assured that the worst is behind us, and prices are actually rising nationally. Let’s connect so that I can provide expert insights into the local market, explaining what we’re observing with home prices in our area.
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