The recent changes in home prices are top of mind for many as the housing market begins gearing up for spring. It can be hard to navigate misleading headlines and confusing data, so here’s what you should know about today’s home prices.
Local price trends still vary by market, but looking at national data, Nataliya Polkovnichenko, Ph.D., Supervisory Economist at the Federal Housing Finance Agency (FHFA), explains:
“U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”
Month-over-month home price changes can be seen in the chart below. The data also shows that price depreciation peaked around August. Since then, any depreciation has been even milder. In other words, today’s home prices aren’t in a freefall.
What Does This Mean for Your Clients?
If they currently own their house, then they may be concerned about even the smallest decline in prices, and if they are looking to buy, then they might try to see how low it will go. However, we should keep in mind how much home values grew over the last few years. Compared to that growth, any declines we’re seeing nationally are likely to be minimal. Selma Hepp, Chief Economist at CoreLogic, shares:
“. . . while prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.”
It’s also important to remember that every local market is different, so while this is generally happening everywhere, you could be experiencing something a little different.
Bottom Line
Contrary to some opinions, the housing market is not going through any kind of steep decline, and in fact, prices have mostly stabilized. Like we keep saying, there is no better time to buy or sell a house than right now. So if your clients have been waiting, then they may want to consider doing it now. While we don’t expect to see any great fluctuations in any direction for the rest of the year, individual markets may vary.
