Numbers Count: Slower & steady for home prices

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Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

Man and woman walking home and holding keys

The numbers: Home prices rose 5.4% in January, slowing from December’s 8.8% seasonally adjusted annual growth rate, according to the latest Case-Shiller (CS) National Home Price Index released March 29.

Home price appreciation and sales slowed in January after a late-2015 surge when buyers were trying to stay ahead of anticipated interest rate increases, according to the National Association of Home Builders. House prices are expected to continue rising steadily but at a slower pace than in recent months, according to NAHB. Following the tumultuous boom to bust to boom in home prices, the recent increases have brought house prices more in line with long term trends.

What counts: As homeowners, we all want our property to appreciate, and we may think the faster the better. Meanwhile, as buyers, we may cringe when we see double-digit jumps in home prices. Rapid home price appreciation may discourage some buyers – particularly first-time buyers – or even prevent some buyers from being able to afford to buy. (But remember, as I’ve pointed out before, there are programs, including low-down payment options, to help qualified buyers get into a home.)

Data indicating price increases are more in line with long-term trends is welcome news for potential buyers and most owners. Steady, modest home price appreciation is healthy for the housing market. Appreciation helps homeowners to build equity in their property. Meanwhile, moderate appreciation helps prevent potential buyers from getting discouraged. Rapid price rises have been keeping some buyers out of the market in recent years.

There’s a lot of data out there on home prices. If you’re looking for home price appreciation information, here are several helpful sources that I like to look at from time to time:

1) Monthly Home Price Index from the Federal Housing Finance Agency
2) Case-Shiller National Home Price Index
3) Home Price Insights published monthly by CoreLogic
4) National Housing Report release monthly from RE/MAX
5) Zillow Home Value Index

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