Wednesday, January 18, 2023
Whether you’re already a homeowner or you’re just planning to become one, the recent headlines about home prices may leave you with more questions than answers. News stories talking about home prices falling are raising concerns about a repeat of what happened to real estate prices in the crash in 2008.
Based on those headlines, one of the questions weighing on many minds is: How much will home prices decline? What you may not likely realize is that expert forecasters are not calling for a free fall in prices. In fact, looking at the latest data, there’s a case to be made for the argument stating that biggest portion of month-over-month price depreciation nationally is already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: Have home values hit bottom?
Let’s review the latest data from several reputable industry sources (see chart below):
The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to be released.
Let’s focus in on what the red numbers reveal. The red numbers are the change in home values over the last four months that have been published. If we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.
While that doesn’t guarantee home price depreciation has hit bottom, it does confirm that prices are not free falling, and it may be an early signal that the worst is already behind us. When the numbers for November and December become available, that data may provide additional validation of this national trend.
Bottom Line
Home prices month-over-month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in your local market, let’s connect to review your area and needs together.
Courtesy of Keeping Current Matters