If you find yourself a bit unclear about the current trends in home prices, you're not alone. Despite data proving otherwise, some still claim that prices are on the decline. This confusion stems from unreliable sources and media coverage that may not accurately represent the true state of the data.

To simplify things, let's break down the essential information backed by reliable data.

Understanding Normal Home Price Seasonality The housing market experiences predictable patterns each year, known as seasonality. Spring marks the peak of home buying activity, remaining robust through the summer but gradually tapering off as cooler months approach.

Home prices align with seasonality because they appreciate most when in high demand. The graph below, utilizing Case-Shiller data from 1973 through 2022 (not adjusted for seasonality), illustrates the typical percent change in monthly home prices:

As depicted, at the start of the year, home prices grow, albeit not as much as during the spring and summer markets. The market is less active in January and February due to fewer relocations in the cooler months. As the market enters the peak homebuying season in spring, activity intensifies, resulting in a more significant increase in home prices. Subsequently, as fall and winter approach, prices continue to rise, albeit at a slower pace as activity decreases.

This Year's Seasonality Trends Now, let's compare this year's data to the long-term trend (see graph below):

The dark bars represent the established trend, while the green bars depict this year's data. Notice that the green bars are aligning with the typical market behavior. This is positive news, indicating more sustainable price growth compared to recent years.

In essence, national prices aren't plummeting; instead, price growth is normalizing. Moving forward, there's a possibility that the media might misinterpret this slowdown in home price growth as an actual decline. So, it's crucial not to blindly believe headlines. The included data provides the context needed to truly comprehend the situation. If you encounter confusing headlines, consult a trusted real estate professional for clarification.

Remember, it's standard for home price growth to ease as the year progresses, but this doesn't signify a decline. Prices are merely rising at a more moderate pace.

In Conclusion

Home price appreciation is returning to normal seasonality, which is a positive development. If you have questions about local price trends, let's connect to discuss further.