In today’s fast-paced news landscape, it’s natural to feel uncertain about the current state of home prices and worry about potential future outcomes. However, it’s important to approach the headlines with a discerning eye, as they may be needlessly amplifying negative sentiments. By taking a year-over-year perspective, we gain a more comprehensive understanding of the situation. While it is true that home prices experienced a slight decline, it’s crucial to acknowledge that this comparison is being made against an extraordinary period when prices soared well above average levels, akin to a ‘unicorn’ year.
To avoid an unfair comparison to that previous peak, we need to look at monthly data. And that tells a very different and much more positive story. While local home price trends still vary by market, here’s what the national data tells us.
When examining the past year’s housing market from a monthly perspective, it becomes apparent that it can be divided into distinct phases. The first half of 2022 witnessed a rapid and steady rise in home prices, indicating a strong upward trend. However, starting in July, there was a notable shift as prices began to decline, (shown in red in the graphs above). By approximately August or September, the market began to stabilize, suggesting a leveling off of prices.
However, it’s essential to note that the most recent data for early 2023 reveals a noteworthy development. These graphs depict a resurgence in home prices, indicating an upward trajectory once again. This resurgence underscores the evolving nature of the housing market and hints at renewed growth and potential opportunities for buyers and sellers alike.
The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening – home prices are rising again.
Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, says this about home price trends:
“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.”
In addition, experts believe one of the reasons prices didn’t crash like some expected is because there aren’t enough available homes for the number of people who want to buy them. Even with today’s mortgage rates, there are more people looking to buy than there are homes available for sale.
Mark Fleming, Chief Economist at First American, explains how more demand than supply keeps upward pressure on prices:
“History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices.”
Doug Duncan, Senior VP and Chief Economist at Fannie Mae, states home price growth is exceeding expectations thanks to that high demand:
“. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .”
How Can This Affects You:
- Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices have bounced back should bring you some relief. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
- Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, it might be a good idea to team up with a real estate agent to list your house. You don’t have to wait any longer because the latest data suggests things are turning in your favor.
If you delayed your moving plans because you were concerned about home prices dropping, the latest data reveals the worst is already over, and prices are appreciating nationally. Partner with a local real estate agent so you know what’s happening with home prices in your area.
Got question about our local Huntsville Metro Area Real Estate Market? Make sure we connect to explore your options in today’s market before 2023 is over!
Remember, The Brooks Family Of Realtors has been serving the North Alabama and Tennessee Valley since 1972.