Don't be misled by today's headlines about home prices. While it is easy to feel uncertain, the truth is that national home prices are not in a freefall. According to the latest data, there is good reason to be optimistic. While local markets may vary, the national trend remains positive. In fact, when we compare year-over-year data, home prices have continued to appreciate, albeit at a slower pace than during the peak of the pandemic. For a more detailed view, take a look at the monthly data and you'll see that home prices have already bottomed out and are on their way back up nationwide.
Based on recent reports from three reputable sources, the graphs show that the most severe home price declines are now in the rearview mirror, and prices nationwide are slowly but surely heading upward.
The housing market in the past year can be divided into two parts, as revealed by a more detailed monthly view. In the first half of 2022, home prices rose steadily and reached their peak in June. However, they began to decline in July and started stabilizing around August or September. Recent data for early 2023 indicates a rebound in momentum, with prices picking up as we head into the busier spring season. Despite the fluctuations, all three reports show that prices have stabilized, which bodes well for the housing market. This suggests that a national shift is taking place and prices are starting to tick back up, although it's still too early to draw conclusions based on one to two months of data.
According to Andy Walden, Vice President of Enterprise Research at Black Knight, home prices have rapidly reversed course in only five months. From declining in 92% of major U.S. markets on a seasonally adjusted month-over-month basis in October 2022, to rising in 92% of markets in February 2023.
The positive turn in prices can be attributed to the limited availability of homes for sale. As Selma Hepp, Chief Economist at CoreLogic suggests, the lack of inventory in this housing cycle is causing prices to rebound. The monthly gains in home prices in many large metros indicate a turning point in the market.
Here’s What This Means for You
Sellers: Are you ready to sell your house but are worried about home prices impacting its value? Don't hold back any longer! Recent data suggests the tables have turned in your favor, so go ahead and make your move happen.
Buyers: If you have been holding off on purchasing due to the fear of decreasing home values, now is the time to act. The market is on an upward trend and buying now means you can get in before prices rise even higher. Plus, owning a home is an asset that typically increases in value over time, so don't miss out on this chance to invest in your future.
