Have Home Values Hit Bottom?

Whether you're already a homeowner or looking to become one, the recent headlines about home prices may leave you with more questions than answers.

First, news stories are talking about home prices falling, raising concerns about a repeat of what happened to prices in the crash in 2008.
Based on those headlines, one of the questions on many minds is: how much will home prices decline? But you may need to realize that expert forecasters aren't calling for a free price fall. If you look at the latest data, it's possible that the most significant portion of month-over-month price depreciation nationally may already be behind us – and even those numbers weren't substantial declines on the national level. So 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 (see chart below):

Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. Unfortunately, November and December numbers have yet to come out.  Let's focus on what the red numbers tell us. The red numbers are the change in home values over the last four months. And if we isolate the previous four months, what the data shows is, in each case, home price depreciation peaked in August. While that doesn't guarantee home price depreciation has hit bottom, it confirms prices aren't in 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 validate this national trend further.

Bottom Line

Home prices month-over-month have depreciated for the past four months, but there's a solid case that the worst may be behind us. If you have questions about what's happening with home prices in your local market, contact The Aaronson Group.  Call:  949-388-5194 or email: info@previewochomes.com

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