Home Prices Are Rebounding

Home Prices Are Rebounding

If you're keeping up with the latest news, you might be feeling uncertain about the current state of home prices and worrying about what the future holds. However, it's important to keep things in perspective. While today's headlines may seem overly negative, if we look at the bigger picture, we can see that prices have only dropped slightly compared to a year ago. It's important to remember that last year was an outlier, with prices reaching unprecedented highs that were simply not sustainable in the long run. So while there may still be some uncertainty in the housing market, there's no need to panic or assume the worst is yet to come.

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.

The graphs below use recent monthly reports from three sources to show the worst home price declines are already behind us, and prices are appreciating nationally.

Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again.

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.” 

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 . . .”

Here’s How This Affects You

• Buyers:  If you've been hesitant to make a purchase because you were concerned that your home's value might decrease, I have some good news for you. Home prices have rebounded, which should offer you some comfort. Plus, it's an excellent chance for you to invest in something that typically appreciates over time.
• Sellers: It's time to take action and sell your house with confidence. Don't let the fear of fluctuating home prices hold you back anymore. By partnering with Stephanie Deeds, you can confidently list your house and rest assured that the latest data is in your favor. So why wait any longer? It's time to seize the opportunity and make your move.

Bottom Line

Rest assured that the concerns you had about home prices dropping and delaying your moving plans are no longer relevant. The latest data clearly shows that the worst is behind us, and home prices are now appreciating nationwide. You can count on me to keep you informed about the latest developments in our local real estate market. Let's touch base and discuss how you can take advantage of these exciting market conditions.