Have Home Values Hit Bottom?
Whether you are already a homeowner or you are looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that is raising concerns about a repeat of what happened to prices in the crash in 2008.
One of the questions that is on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters are not calling for a free fall in prices. In fact, if you look at the latest data, there is a case to be made that the biggest portion of month-over-month price depreciation nationally may already be behind us – and even those numbers were not significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?
Let’s take a look at the latest data from several reputable industry sources...
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 in 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, in each case, home price depreciation peaked in August.
While that does not guarantee home price depreciation has hit bottom, it confirms prices are not 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 are released, data will be able to further validate this national trend.
Home prices month-over-month have depreciated for the past four months on record, but there is a strong case to be made that the worst may be behind us. If you have questions about what is happening with home prices in our local market, let’s connect.