Home prices are going back up

If you’ve been keeping up with the news lately, you might not be sure what’s going on with home prices and worry that the worst is yet to come. That’s because the news stories of today paint an overly bad picture. If we look at home prices year over year, we can see that they did go down a bit, but that’s because we’re comparing them to a “unicorn” year when prices were much higher than usual.

Figures of residential buildings and an easel with real estate market recovery trend chart. Value and cost. Increased interest and demand for housing after price reduction. Investment revitalization

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We need to look at monthly numbers so that we don’t unfairly compare this peak to the one before. And that tells a much happier and much different story. Local home price trends still change from market to market, but here’s what we can learn from national data.

The prices of homes went up quickly in the first half of 2022. But prices started going down in July (shown in red in the graphs above). Around August or September, the trend began to level out. But the most latest data for the beginning of 2023 shows that prices are going up again.

The fact that prices have gone up for three or more months in a row in all three reports is a good sign for the home market. The data from month to month shows that there is a change happening across the country: home prices are going up again.

Craig J. Lazzara, who is the Managing Director at S&P Dow Jones Indices, has this to say about the changes in home prices:

“If I were trying to prove that the drop in home prices that began in June 2022 and ended in January 2023 was for sure over, the data from April would support my case,”

Experts think that one reason prices didn’t drop as much as some people thought they would is that there aren’t enough homes for the number of people who want to buy them. Even with mortgage rates as they are now, there are more people looking to buy than there are houses for sale.

Mark Fleming, Chief Economist at First American, describes why prices keep going up when there is more demand than supply:

“History has shown that higher interest rates may slow down price increases, but they don’t stop them completely. This is especially true in the housing market today, where the demand for homes keeps outpacing the supply, putting pressure on house prices.

Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, says that high demand is causing home prices to rise faster than expected:

“… housing prices continue to grow faster than what was expected… The housing market’s performance shows how strong demand is due to population growth…”

How does this affect you as a buyer? If you haven’t bought a home yet because you were afraid the price would go down, knowing that prices have gone back up should make you feel better. It also gives you a chance to own something that tends to get more valuable over time.

Sellers: If you haven’t sold your house yet because you were worried about how changing home prices would affect its value, it might be a good idea to list it with the help of a real estate agent. You don’t have to wait any longer, because the most recent information shows that things are getting better for you.

Bottom Line

If you put off moving because you were worried about home prices going down, the latest data shows that the worst is over and prices are going up across the country. Work with a real estate agent in your area to find out what’s going on with home prices there.