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The Return of Normal Seasonality for Home Price Appreciation

If you're contemplating a move, you might be wondering about the current state of home prices. Despite some media reports, it's important to note that, on a national scale, home prices aren't declining. Instead, we are witnessing a shift towards more moderate price growth. To truly grasp this trend, let's delve into the context.


Within the housing market, there are consistent patterns that occur throughout the year known as seasonality. Spring tends to be the peak homebuying season, characterized by heightened market activity. This momentum typically extends into the summer but gradually subsides as the cooler months approach. Home prices are influenced by seasonality because they tend to appreciate the most when demand is at its peak.


This phenomenon contributes to a well-established long-term trend in home prices. The graph below, utilizing data from Case-Shiller, illustrates the typical monthly movement of home prices from 1973 through 2022 (not adjusted for seasonality, allowing you to observe the natural ebb and flow):


As shown in the data, home prices follow a seasonal pattern. They grow less in the cooler months (January and February) when the market is less active and surge during the peak homebuying season in spring. As fall and winter approach, price growth decelerates but still generally rises.


Higher mortgage rates have contributed to this return of seasonality. According to Selma Hepp, Chief Economist at CoreLogic, this means that monthly price increases are now aligning with historical seasonal norms.


Understanding the significance of this trend is crucial. In the upcoming months, you'll encounter more media coverage about home prices, often accompanied by industry jargon such as:

  1. Appreciation: Referring to price increases.

  2. Deceleration of appreciation: Indicating that prices are still rising but at a slower or more moderate rate.

  3. Depreciation: Signifying a decrease in prices.


In essence, home price appreciation is normalizing in line with seasonal trends, and it's not a sign of prices falling. If you're curious about price trends in your area, consult a local real estate professional for insights.

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