If you're finding the noise around home prices a bit overwhelming, you're not alone. Conflicting narratives exist—some say prices are dropping, but the data tells a different story. The confusion arises from unreliable sources and media misinterpretation.
To cut through the clutter, here’s the real deal backed by reliable data.
Decoding Normal Home Price Patterns
Seasonality plays a pivotal role in the housing market. Each year follows predictable cycles. Spring marks the peak homebuying season, while activity tends to taper as cooler months approach.
Home prices sync with this pattern because demand influences appreciation. Over the long haul, there's a consistent trend in home price movements. The graph below, using unadjusted Case-Shiller data from 1973 to 2022, illustrates the typical monthly price changes, highlighting the seasonality:
At the year's start, prices rise, albeit not as steeply as during the spring and summer peaks. The lower activity in January and February means slower growth. As the market gears up for peak season, prices surge in response. Come fall and winter, prices continue to grow but at a steadier pace as activity eases.
This Year’s Trend Aligns with Seasonality
Let’s compare this year’s trend with the long-term pattern (as shown in the graph below):
The green bars represent this year's data, while the dark bars depict the established trend. The green bars are aligning more closely with the traditional market behavior. This alignment signals a healthier, more sustainable price growth compared to recent years.
In essence, national prices aren’t plummeting—they're normalizing. Going forward, the media might misinterpret this slowdown as a decline in prices. So, don’t take headlines at face value; the data presented here provides the context to understand the situation. When headlines confuse you, consult a trusted real estate professional for clarity.
It's typical for home price growth to ease as the year progresses—this doesn’t equate to prices falling. They're simply appreciating at a more measured pace.
Home price appreciation is reverting to standard seasonal trends, which is a positive development. If you’re curious about price trends in your local area, reach out to a real estate professional for reliable insights.