The Worst of Home Price Declines Are Behind Us!
If you’ve been following the news, you may feel unsure about what’s happening with home price declines and if the worst is yet to come. Today’s headlines are painting an unnecessarily negative picture–contrary to those headlines, home prices aren’t in a freefall. The latest data tells a very different, much more positive story! Local home price trends will still vary by market, but here’s what the national data tells us.
If we take a year-over-year view, home prices stayed positive. They just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of the trends in the market, let’s look at the monthly data.
This graph uses recent reports from three sources to show that the worst home price declines are already behind us and prices are on their back up nationally.
What this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing and peaked in June. Then in July, home prices started to decline (shown in red above). And around August or September, the trend began to stabilize. Looking at the most recent data for the early part of 2023, the graph also shows a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining momentum as we move into the busier spring season.
While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. Month-over-month data conveys a clear consensus that a national shift is taking place today.
Andy Walden, Vice President of Enterprise Research at Black Knight, says this about home price trends:
“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, explains the limited supply of homes available for sale is contributing to this positive turn:
“…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?
If you’re a seller: if you’ve been holding off on selling because you’re worried about what was happening with home prices and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your home. You don’t have to put your needs on hold any longer because the data shows a turn in your favor!
If you’re a buyer: if you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind that things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time!