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What's Actually Happening With Home Prices Today

What’s Actually Happening with Home Prices Today? | MyKCM

One of the biggest questions people are asking right now is: what’s happening with home prices? There are headlines about ongoing price appreciation, but at the same time, some sellers are reducing the price of their homes. That can feel confusing and makes it more difficult to get a clear picture.

Part of the challenge is that it can be hard to understand what experts are saying when the words they use sound similar. Let’s break down the differences among those terms to help clarify what’s actually happening today.

  • 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. That means home prices are appreciating, just not at the record-breaking pace they have over the past year. In 2021, data from CoreLogic tells us home prices appreciated by an average of 15% nationwide. And earlier this year, that appreciation was upward of 20%. This year, experts forecast home prices will appreciate at a decelerated pace of around 10 to 11%, on average.

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.

What’s Actually Happening with Home Prices Today? | MyKCM

As the green bars show, home prices appreciated between 19-20% year-over-year from January to March. But over the last few months, the pace of that appreciation has decelerated to 18%. This means price growth is still climbing compared to last year but at a slower rate.

As the Monthly Mortgage Monitor from Black Knight explains:

“Annual home price growth dropped by nearly two percentage points . . . – the greatest single-month slowdown on record since at least the early 1970s. . . While June’s slowdown was record-breaking, home price growth would need to decelerate at this pace for six more months to drive annual appreciation back to 5%, a rate more in line with long-run averages.”

Basically, this means, while moderating, home prices are still far above the norm,

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What Sellers Need to Know in This Market (Psst! Good Info for Buyers Here Too!)

What Sellers Need To Know in Today’s Housing Market | MyKCM

If you’re thinking about selling your house, you may have heard about the housing market slowing down in recent months. While it’s still a sellers’ market, the peak frenzy the market saw over the past two years has cooled some. If you’re asking yourself if you’ve missed your chance to sell your house and make a move, the good news is you haven’t – motivated buyers are still out there. But you do need to price your house right for today’s market. Here’s why.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: 

Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

It’s true buyer demand has slowed over the past few months as higher mortgage rates made it more expensive to buy a home. The result is fewer bidding wars and less competition among buyers (see visual below):

What Sellers Need To Know in Today’s Housing Market | MyKCM

But don’t forget – that’s compared to the severely overheated market we saw over the past two years. According to the latest Consumer Confidence Index from NAR:

“. . . 39% of homes sold above list price, down from 51% a month ago and 50% a year ago.”

While this is a slower pace than even one month ago, serious buyers are still actively in the market, and they’re buying homes that are priced right. In fact, the Confidence Index also notes the average home is selling in just 14 days.

If you’re aiming to sell your house, be sure you’re working with your agent to price it for today’s housing market. As buyer demand softens, it’s important to understand this isn’t the same market as last year. It’s not even the same market as just a few months ago. But it is still a sellers' market.  

If you’re ready to sell your house, seek the advice of a real estate professional. In some cases, you’ll need to adjust your expectations accordingly to meet the market where it is today. Selma Hepp, Interim Lead, Deputy Chief Economist at CoreLogic, explains what’s happening and what it means

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Home-Price Deceleration Doesn't Mean Home-Price Depreciation!

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM

Experts in the real estate industry use a number of terms when they talk about what's happening with home prices. And some of those words sound a bit similar but mean very different things. To help clarify what's happening with home prices and where experts say they're going, here’s a look at a few terms you may hear:

  • Appreciation is when home prices increase.
  • Depreciation is when home prices decrease.
  • Deceleration is when home prices continue to appreciate, but at a slower pace.

Where Home Prices Have Been in Recent Years

For starters, you’ve probably heard home prices have skyrocketed over the past two years, but homes were actually appreciating long before that. You might be surprised to learn that home prices have climbed for 122 consecutive months (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM

As the graph shows, houses have gained value consistently over the past 10 consecutive years. But since 2020, the increase has been more dramatic as home-price growth accelerated.

So why did home prices climb so much? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was high and supply was low.

Where Experts Say Home Prices Are Going

While this is helpful context, if you’re a buyer or seller in today’s market, you probably want to know what’s going to happen with home prices moving forward. Will they continue that same growth path or will home prices fall?

Experts are forecasting ongoing appreciation, just at a decelerated pace. In other words, prices will keep climbing, just not as fast as they have been. The graph below shows home price forecasts from seven industry leaders. None are calling for prices to fall (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM

Mark Fleming, Chief Economist at First American, identifies a key reason why home prices won’t depreciate or drop:

In today’s housing market, demand for homes continues to outpace supply, which is keeping the pressure on house prices, so don’t expect house prices to decline.”

And although housing supply is starting to tick up, it’s not enough to make

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What Buyers and Sellers Can Expect from the Spring 2022 Market

What You Can Expect from the Spring Housing Market

What You Can Expect from the Spring Housing Market | MyKCM

Hi there!  It's Spring in the Gallatin Valley!  I haven't seen any robins yet, but the snow has melted, and I believe we finally have Winter backed into a corner... 

As the spring housing market kicks off, you may want to know what you can expect this season when it comes to buying or selling a house. While there are multiple factors causing some uncertainty, including the conflict overseas, rising inflation, and the first rate increase from the Federal Reserve in over three years — the housing market seems to be relatively immune.

Here’s a look at what experts say you can expect this spring.

1. Mortgage Rates Will Climb

Freddie Mac reports the 30-year fixed mortgage rate has increased by more than a full point in the past six months. And despite some mild fluctuation in recent weeks, experts believe rates will continue to edge up over the next 90 days. As Freddie Mac says:

“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”

If you’re a first-time buyer or a seller thinking of moving to a home that better fits your needs, realize that waiting will likely mean you’ll pay a higher mortgage rate on your purchase. And this higher rate drives up your monthly payment.  It can really add up over the life of your loan.

2. Housing Inventory Will Increase

There may be some relief coming for buyers searching for a home to purchase. Realtor.com recently reported that the number of newly listed homes has grown for each of the last two months. Also, the National Association of Realtors (NAR) just announced the month's supply of inventory actually increased for the first time in eight months. The inventory of existing homes usually grows every spring, and it seems, based on recent activity, the next 90 days could bring more listings to the market.

If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find

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Homebuyers Interested NOW!

More People Are Planning To Buy a Home Soon | MyKCM

 

While some homeowners may be tempted to hold off until spring to list their houses, you should know – homebuyers aren’t waiting. Demand is high today as more people are trying to beat rising mortgage rates.  As a result, eager buyers are entering the market or moving their plans up so they can make their purchases as soon as possible.

The most recent Consumer Confidence Survey finds that, of those surveyed, the percentage of people planning to buy over the next six months has increased substantially since last fall (see graph below):

More People Are Planning To Buy a Home Soon | MyKCM

As the graph shows, the number of consumers fast-tracking their plans to purchase a home has crept up over the past three months. That indicates many buyers are evaluating their strategy and realizing they should act sooner rather than later. And for homeowners planning to sell, it’s a signal that now may be the time to list.

While more people are moving their plans up, others are actively putting theirs in motion. Time on the market is a great indication that homebuyers are motivated and moving quickly. According to a recent realtor.com report, the average home sold faster this January than any January on record.

Danielle Hale, Chief Economist at realtor.com, notes:

“Homes sold at a record-fast January pace, suggesting that buyers are more active than usual for this time of year.”

What Does That Mean for You?

Homebuyers are rethinking their strategies and moving their plans forward. Others are making their moves today. That means demand for your house isn’t just increasing – it’s high right now.

And because there are so few homes available for determined purchasers to choose from, if you’re planning to sell your house this year, doing so sooner means you can take advantage of high buyer demand before more houses are listed in your neighborhood. Why is this important? Because as more houses are put up for sale, buyers will have more options. But until then, your house will be in the spotlight.

Bottom Line

With so many buyers eager to make a purchase, you could

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Average Homeowner Gained $56K in Equity Over the Past Year (Say Whaat?!)

The Average Homeowner Gained $56,700 in Equity Over the Past Year (Say WHAAT?!)

The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

Hi there!   

When you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non-financial benefits, like the security or stability a home provides. But what about equity? While it can be overlooked, a homeowner’s equity helps build long-term wealth over time. Here’s a look at what equity is and why it matters.

For a homeowner, your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. That’s exactly what’s happening today. There aren't enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. That’s because people are willing to pay more to buy a home. Right now, this low supply and high demand are giving current homeowners a significant equity boost.

Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:

Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.

To find out just how much rising home values have impacted equity, we turn to the latest Homeowner Equity Insights from CoreLogic. According to that report, the average homeowner’s equity has grown by $56,700 over the last 12 months.  Here in the Gallatin Valley,  homeowners' equity gains were higher than the national average.  If you'd like to know your equity position, give me a call and I'll get an analysis into your hands right away.  406.570.1653

Curious how your state stacks up? Check out the map below to find out the average equity gain for your area.The Average Homeowner Gained over $56,700 in Equity over the Past Year |<img width='700' height='auto'  src=

How Rising Equity Impacts You

If you’re already a homeowner, equity not only builds your wealth, it also opens doors for you to achieve your goals. It works like this: when you sell your house, the equity you built up comes back to you in the sale. You

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