The Facts
US home prices fell year-over-year for the first time in more than 10 years in February 2023, the National Association of Realtors reported Tuesday. The median existing-home price decreased by 0.2% to $363K.
The Association also reported that lower prices, in addition to lower mortgage rates from mid-November 2022 to this February, led to the largest jump in the sale of previously owned homes in 2.5 years, ending a 12-month streak of declines.
The Spin
Narrative A
The housing market is coming back thanks to buyers who are conscious of changing mortgage rates and taking advantage of even the slightest dip, even as the spring buying season is just beginning. Prices could become even more affordable moving forward, but the lack of inventory means it’s still a good time to sell a home. Everybody’s winning in this recovery.
Narrative B
Don’t uncork the champagne yet. This data was computed before Silicon Valley Bank and Signature Bank’s collapses, which are causing unrest throughout the banking sector. There should be less consumer demand and tightened lending standards from banks for a while now, and there’s also a chance the Fed will do another major rate hike. The housing market, like the economy as a whole, is too unstable to celebrate.
