Media coverage about what\u2019s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they\u2019re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here’s an explanation of each.\u00a0<\/p>\n
This comparison measures the change in home prices from the same month or quarter in the previous year.<\/strong> For example, if you’re comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022.Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating.<\/p>\n This comparison measures the change in home prices from one month to the next.<\/strong> For instance, if you’re comparing M-O-M home prices for April 2023, you would compare them to the home prices for March 2023.Meanwhile, M-O-M comparisons analyze changes within a single month, giving a more immediate snapshot of short-term movements and price fluctuations. They are often used to track immediate shifts in demand and supply, seasonal trends, or the impact of specific events on the housing market.<\/p>\n The key difference between Y-O-Y and M-O-M comparisons lies in the time frame being assessed. Both approaches have their own merits and serve different purposes depending on the specific analysis required.<\/p>\n We\u2019re about to enter a few months when home prices<\/a> could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the American housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The numbers<\/a> for April seem to suggest that\u2019s what we\u2019ll see in the months ahead (see graph below<\/em>):<\/p>\n <\/a><\/p>\n That\u2019ll generate troubling headlines that say home values are falling<\/a>. That\u2019ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward.<\/p>\n However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what\u2019s truly happening with home values: after several months of depreciation, it appears we\u2019ve hit bottom and are bouncing back.<\/strong><\/p>\n Here\u2019s an example of M-O-M home price movements for the last 16 months from the CoreLogic Home Price Insights<\/em> report<\/a> (see graph below<\/em>):<\/p>\n <\/a><\/p>\n So, if you\u2019re hearing negative headlines about home prices, remember they may not be painting the full picture. For the next few months, we\u2019ll be comparing prices to last year\u2019s record peak, and that may make the Y-O-Y comparison feel more negative. But, if we look at the more immediate, M-O-M trends, we can see home prices are actually on the way back up<\/a>.<\/p>\n There\u2019s an advantage to buying a home now. You\u2019ll buy at a discount from last year\u2019s price and before prices start to pick up even more momentum. It\u2019s called \u201cbuying at the bottom,\u201d and that\u2019s a good thing.<\/p>\n If you have questions about what\u2019s happening with home prices, or if you\u2019re ready to buy before prices climb higher, connect with a local real estate agent.<\/p>","protected":false},"excerpt":{"rendered":" Media coverage about what\u2019s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they\u2019re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). […]<\/p>\n","protected":false},"author":0,"featured_media":6782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/posts\/6781"}],"collection":[{"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/comments?post=6781"}],"version-history":[{"count":0,"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/posts\/6781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/media\/6782"}],"wp:attachment":[{"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/media?parent=6781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/categories?post=6781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/twolakeshomes.com\/wp-json\/wp\/v2\/tags?post=6781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Month-over-Month (M-O-M):<\/strong><\/h5>\n
Why Is This Distinction So Important Right Now?<\/strong>\u00a0<\/h4>\n
Why Does This Matter to You?<\/strong><\/h4>\n
Bottom Line<\/h3>\n