The current news headlines regarding home prices may have left you uncertain and concerned about whether the worst is yet to come. However, it’s important to note that these headlines are creating an unnecessarily negative outlook. In reality, home prices are not experiencing a drastic decline. The latest data presents a different and more positive story. While local home price trends still vary by market, national data provides valuable insights.
Taking a year-over-year perspective, home prices have remained positive, albeit with a slower appreciation compared to the peak of the pandemic. To gain a more detailed understanding of market trends, it’s necessary to analyze monthly data.
The monthly graphs, utilizing recent reports from three sources, depict that the worst declines in home prices have already passed, and prices are now on the rise nationally.
Analyzing the more detailed monthly view, we observe that the housing market has witnessed two distinct halves over the past year. In the first half of 2022, home prices were steadily increasing, reaching their peak in June. However, starting in July, home prices began to decline (as shown in red in the graphs). By around August or September, the downward trend stabilized. The most recent data for the early part of 2023 indicates a rebound in momentum, with prices starting to increase once again. As we enter the busy spring season, monthly changes in home prices are gaining momentum.
While it’s important to note that short-term data doesn’t establish a trend, the fact that all three reports indicate stabilized prices is an encouraging sign for the housing market. The month-over-month data reveals an early consensus that a national shift is occurring. In essence, home prices are starting to rise once more.
“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.”
Andy Walden, Vice President of Enterprise Research at Black Knight
“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.”
Selma Hepp, Chief Economist at CoreLogic
Summary:
- Contrary to negative headlines, home prices are not in freefall and the worst declines are already behind us.
- Year-over-year, home prices have remained positive, although appreciating at a slower rate than during the peak of the pandemic.
- Monthly data shows that after reaching a peak in June 2022, home prices started to decline but stabilized by August or September.
- Recent data for early 2023 indicates a rebound in momentum, with prices ticking back up.
- All three reports highlight stabilized prices, suggesting a national shift is taking place.
- Limited housing inventory contributes to the positive turn in home prices.
- For sellers, it’s a favorable time to list your house as the latest data shows a turn in your favor.
- Buyers can now have peace of mind as home prices are looking up, allowing them to purchase before prices climb further and potentially own an appreciating asset.
- Consult local real estate professional, Dan Skelly, to gain expert insights on home prices in your area.
