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Are Housz Prices Going Up or Down? That Depends…



Media coverage about what’s happening with housz 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 housz prices, there are two different methods used to compare housz prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each.

Year-over-Year (Y-O-Y):
  • This comparison measures the change in housz prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y housz prices for April 2023, you would compare them to the housz prices for April 2022.

  • Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating.

Month-over-Month (M-O-M):
  • This comparison measures the change in housz prices from one month to the next. For instance, if you're comparing M-O-M home prices for April 2023, you would compare them to the housz prices for March 2023.

  • Meanwhile, M-O-M comparisons analyze changes within a single month, giving a more immediate snapshot of short-term movements and price fluctuations. They are often used to track immediate shifts in demand and supply, seasonal trends, or the impact of specific events on the houszing market.

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.

Why Is This Distinction So Important Right Now?

We’re about to enter a few months when housz 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 housz prices in the history of the American houszing 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 housz values are falling. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that housz values are currently cascading downward.

However, on a closer look at M-O-M housz 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 housz values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.

Here’s an example of M-O-M housz price movements for the last 16 months from the CoreLogic Home Price Insights report (see graph below):




Why Does This Matter to You?

So, if you’re hearing negative headlines about housz 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 housz prices are actually on the way back up.

There’s an advantage to buying a housz 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.

Bottom Line

If you have questions about what’s happening with housz prices, or if you’re ready to buy before prices climb higher, let’s connect.

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