Do Home Prices Finally Have to Go Up?
Whether you're a current or prospective homeowner, recent headlines regarding housing prices may leave you with more questions than answers. In news reports, home prices are declining, which raises concerns about a replay of what happened during the 2008 crash.
Based on that news, one of the issues on many people's minds is: how much will home prices fall? What you may not realize is that qualified forecasters are not predicting a price collapse. Based on the most recent data, there's an argument to be made that the majority of month-over-month price depreciation may already be behind us—and even those numbers weren't signed on a national scale. Instead of wondering how far they may fall, the issue is: have property prices reached rock bottom?
Let’s take a look at 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 come out.
Let’s focus on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is that, in each case, home price depreciation peaked in August.
While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December come out, they will help prove this national trend even more.
Although monthly home price declines have been recorded for the past four months, there is reason to believe that the worst may be over. Let's talk if you want to learn more about the state of the housing market in our area.