What's my home worth?

Enter your information and I'll get right back to you with a free home estimate.
Find out!
check

Sent

What's my home worth?

Enter your information and I'll get right back to you with a free home estimate.
Find out!
check

Sent

Terri Gold

Discover Afforable Homes

Terri Gold

Wallace Real Estate

The Return of Normal Seasonality for Home Price Appreciation

September 26, 2023


by Keeping Current Matters

If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.

That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in your local area, connect with a real estate professional.


Tags:

Featured Listings

sold
Gorgeous NEW CONSTRUCTION in the heart of Farragut! This upscale 2 story basement home features an open design with timeless style. Vaulted ceilings & Master on Main w/ walk-in shower, soaking tub, and his/hers WIC, 4 bedrooms w/ WIC plus bonus room..
$1,095,000
sold
4
beds
2
baths
3,427
Sq Ft
sold
A One of a Kind, Once in a Lifetime home. This hand hewn and self-built house is a work of art and a masterpiece of craftsmanship. Over 27 years, the builder, who was a Broadway and Clarence Brown Theater designer, handcrafted this hardwood Posts...
$560,000
sold
3
beds
2
baths
3,202
Sq Ft
sold
LISTING AGENT IS OWNER/SELLER Gorgeous Farragut brick home on Cul-De-Sac that overlooks the 14th fairway of the Fox Den Golf Course. AquaGuard flooring throughout the first floor. Separate staircase leads to the bonus room/5th bedroom...
$800,000
sold
4
beds
4
baths
3,270
Sq Ft
sold
Don't miss this opportunity to make this gorgeous two story basement, located in Farragut with an amazing open floor plan yours! Zoned for Farragut schools. Main level includes hardwood floors throughout, master bedroom with custom shelving...
$674,900
sold
3
beds
4
baths
2,773
Sq Ft

Recent Posts