Good News About Home Pricing in the United States
Economic triggers can be confusing for the lay person in understanding why some price increases are better or worse than others. Higher oil prices are good for Wall Street but bad for people that buy gas. Higher priced stocks for Apple are great for stock holders and Wall Street and also good for consumers because it makes Apple products more affordable. So it is with home prices. Higher home prices can be bad for home buyers but good for home sellers. Home prices that show steep increases month-over-month can indicate an “out-of-control” housing market which would mean that the real estate market was unstable. OR, it could mean that housing prices were rising after a steep
drop to sustainable levels.
The good news about home pricing in the United States now is that home prices are slowly drifting to an average level comparing month-to-month pricing nationwide. During 2012, home prices dramatically increased for months at a time, sparking concerns that the housing market was headed to “bursting the housing bubble” – the problem that caused the Recession to begin with. However, throughout 2014 and 2015, home prices have stabilized to a slow growth pattern, and in some cases, a no growth pattern where prices stay the same for a few months at a time.
According to the Federal Housing Finance Agency (FHFA) and the Standard and Poor’s/Case-Shiller reports, home pricing for both new single-family homes and pre-existing single-family homes has shown a steady recovery with annual growth rates of 4.1% and 3.4% in March and April, 2015, down from a growth rate of 8.6% in February. Home pricing in New Orleans has increased year-over-year from 2014 – 2015, but it has been an increase that has trended more towards “normal” than excessive growth – matching the national trend.