Home prices have finally come down compared with last year, though just fractionally, according to daily reads from Parcl Labs, which looks at high-frequency listing data on single-family homes, condos and townhomes, both new and existing.
They may stay softer, though, as home prices are down 1.4% in just the last three months.
On a national level, home prices have not gone negative since mid-2023, a year after the Federal Reserve first brought rates up from zero, and mortgage rates moved sharply higher. From March 2022 to June 2023, the average rate on the popular 30-year fixed mortgage went from 3.9% to just over 7%, according to Mortgage News Daily.
But even then, prices were negative on a year-over-year basis for just a few months. It was nothing like the great financial crisis when home prices dropped 27% from their peak in 2006 to their trough in 2012, according to the S&P Case-Shiller National Home Price Index.
“More recently we have seen a period of national softness emerging after the rapid run-up during the Covid years, 2020 to 2022,” said Jason Lewris, co-founder of Parcl Labs. “The sharp increase in mortgage rates in 2022 and 2023 created an affordability shock: buyers were priced out, sales volumes dropped, and sellers had to adjust expectations. Historically, that combination of a credit or affordability shock, weaker demand, and more inventory than the market can easily absorb is what tends to produce broad national price declines.”
