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Media coverage about what’s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they’re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here’s an explanation of each.
The key difference between Y-O-Y and M-O-M comparisons lies in the time frame being assessed. Both approaches have their own merits and serve different purposes depending on the specific analysis required.
We’re about to enter a few months when home prices could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the American housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The numbers for April seem to suggest that’s what we’ll see in the months ahead (see graph below):
That’ll generate troubling headlines that say home values are falling. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward.
However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what’s truly happening with home values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.
Here’s an example of M-O-M home price movements for the last 16 months from the CoreLogic Home Price Insights report (see graph below):
So, if you’re hearing negative headlines about home prices, remember they may not be painting the full picture. For the next few months, we’ll be comparing prices to last year’s record peak, and that may make the Y-O-Y comparison feel more negative. But, if we look at the more immediate, M-O-M trends, we can see home prices are actually on the way back up.
There’s an advantage to buying a home now. You’ll buy at a discount from last year’s price and before prices start to pick up even more momentum. It’s called “buying at the bottom,” and that’s a good thing.
If you have questions about what’s happening with home prices, or if you’re ready to buy before prices climb higher, connect with a local real estate agent.
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To help make home price trends easier to understand, let’s focus on what’s typical for the market and omit the last few years since they were anomalies.
Here’s a quick overview of the national trends.
If you’ve been keeping up with the news lately, you’ve probably come across headlines talking about the increase in foreclosures in today’s housing market.
If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come.
Reliable Investment Consulting is a professional team of real estate consultants focused on helping individuals sell, buy, and manage residential and commercial real estate smarter in the Washington, DC, Maryland, and Baltimore metropolitan areas. By leveraging resources used by investors, we help our clients to make more profits and dividends on their real property assets. We help our clients to sell for maximum value and buy like experienced investors
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