So, what’s happening with home prices? There are headlines about ongoing price appreciation, but at the same time, some sellers have reduced their asking rates. This can be confusing and makes it more difficult to get a clear picture of where we’re going as an economy or even within one market segment like housing markets!
To make sure you understand all aspects related to these changes, in particular, let us break them down for you:
- Appreciation is when home prices increase.
- Depreciation is when home prices decrease.
- Deceleration is when home prices continue to appreciate but at a slower or more moderate pace.
Experts agree that, nationally, what we’re seeing today is deceleration. This means home prices are appreciating, just not at the record-breaking pace they have over this past year–and in 2021, data from CoreLogic tells us an average of 15% yay! And earlier this year, 20%. Then forecasts say it will slow down even further: around 10 to 11%.
The graph below uses the latest data from CoreLogic to help tell the story of how home prices are decelerating but not depreciating so far this year.
Home prices are still climbing but at a slower rate. The green bars show that compared to last year’s increases in the first three months of this year over those same periods showed 19% growth from January through March – not as fast anymore.
As the Monthly Mortgage Monitor from Black Knight explains:
It means that while moderating, home prices are still far above the norm, and we would have to see a lot more deceleration before even falling in line with typical rates for growth. That’s not depreciation, though-it’s just slower than expected.
Home prices haven’t fallen or depreciated nationwide; they’re just decelerating. While some unique and overheated markets may see declines in their home value, Drop-off from peak levels has been gradual across most parts of America so far, but there’s no Panicking yet – everyone still expects continued growth!
Sandi & Debbie Say…
If you have questions about what’s happening with home prices in our local area, let’s connect. Call us at 949-293-5139 to schedule a free strategy session with us!
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