{"id":8155,"date":"2023-09-26T10:30:00","date_gmt":"2023-09-26T10:30:00","guid":{"rendered":"https:\/\/thezakariagroup.com\/the-return-of-normal-seasonality-for-home-price-appreciation\/"},"modified":"2023-09-26T10:30:00","modified_gmt":"2023-09-26T10:30:00","slug":"the-return-of-normal-seasonality-for-home-price-appreciation","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/the-return-of-normal-seasonality-for-home-price-appreciation\/","title":{"rendered":"The Return of Normal Seasonality for Home Price Appreciation"},"content":{"rendered":"
\"The<\/p>\n

If you\u2019re thinking of making a move<\/a>, one of the biggest questions you have right now is probably: what\u2019s happening with <\/em>home prices<\/em><\/a>?<\/em>\u00a0Despite what you may be hearing in the news, nationally, home prices aren\u2019t falling. It\u2019s just that price growth<\/a> is beginning to normalize. Here\u2019s the context you need to really understand that trend.<\/p>\n

In the housing market<\/a>, there are predictable ebbs and flows that happen each year. It\u2019s 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<\/a>.<\/p>\n

That\u2019s why there\u2019s a reliable long-term home price trend. The graph below uses data from\u00a0Case-Shiller<\/em><\/a>\u00a0to show typical monthly home price movement from 1973 through 2022 (not\u00a0adjusted<\/a>, so you can see the seasonality):<\/p>\n

<\/a><\/p>\n

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\u2019s 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.<\/p>\n

After several unusual \u2018unicorn\u2019 years<\/a>, today\u2019s higher mortgage rates<\/a> helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic,<\/em> explains<\/a>:<\/p>\n

\u201cHigh mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, <\/em>home prices are still growing but are in line with historic seasonal expectations<\/em><\/strong>.\u201d<\/em><\/p><\/blockquote>\n

Why This Is So Important to Understand <\/strong><\/h4>\n

In the coming months, you\u2019re going to see the media talk more about home prices. In their coverage, you\u2019ll likely see industry terms like these:<\/p>\n