Demystifying Home Prices: Understanding the Real Data

If you’re feeling a bit uncertain about what’s happening with home prices, you're not alone. Misinformation and media coverage can create confusion, making it crucial to rely on real, trustworthy data to gain a clear understanding. Here's a breakdown of the facts:

Normal Home Price Seasonality Explained:

In the housing market, there is a predictable cycle known as seasonality, where demand and activity follow a consistent pattern throughout the year. Spring marks the peak homebuying season, with activity remaining strong through the summer. As the cooler months approach, the market experiences a gradual slowdown.

This seasonality is reflected in home prices, as appreciation is most significant when demand is high. The graph, utilizing data from Case-Shiller spanning from 1973 through 2022, illustrates the typical percent change for monthly home price movement, revealing a reliable long-term trend.

This Year, Seasonality Has Returned:

Examining the data for this year against the long-term trend, we observe a return to the normal cycle of seasonality. The green bars represent the 2022 data, aligning with the historical trend. The noticeable decrease in price growth is not an indication of falling prices; rather, it signifies a return to more sustainable and predictable price growth.

It's important to recognize that normalizing price growth doesn't equate to a decline in home prices. As the year progresses, the media may misinterpret this adjustment as a negative trend. Therefore, it's crucial to approach headlines with a critical eye and seek additional information from trusted real estate professionals.

Bottom Line:

Home price appreciation is returning to a more balanced and sustainable pace, aligning with the normal cycle of seasonality. If questions arise or if headlines create confusion, reaching out to a trusted real estate professional provides the context needed to navigate the market with confidence. Understanding the nuances of real estate data empowers informed decision-making.