WASHINGTON–The median price of a home in the United States was lower in February of 2023 than it was in the same month of 2022, bringing to an end more than a decade of year-over-year increases, the longest on record, according to a National Association of Realtors report.
The NAR reported the median existing home price was $363,000 in February, down 0.2% from one year earlier. The organization said its data show that marks the first monthly year-over-year price decline since February 2012.
Regionally, prices fell more from a year ago in the West (down 5.6%) and Northeast (down 4.5%), where housing is more expensive, the NAR said. But prices were still climbing from last year in the South (up 2.7%) and the Midwest (up 5%).
‘Not the Bottom’
“This is not the bottom for prices,” said Lawrence Yun, chief economist for NAR, in a statement. “We expect a continuing price correction, but we are not expecting prices to crash.”
According to Yun, the median decrease is so small that it is essentially flat. Still, it marks the first technical drop in median home prices that is expected to continue.
“Could we see 5% decline? Sure, but we could also see 5% increase. My forecast has prices declining 2% this year,” Yun stated.
Home Sales Jump
Meanwhile, home sales vaulted higher, marking the largest monthly percentage increase since July 2020, which itself was an anomaly of the pandemic as some restrictions loosened that month to allow a backlog of sales, noted CNN in its analysis (see related story).
“U.S. home sales surged in February, following a full year of declining home sales due to surging mortgage rates and prices that remained elevated, which kept homebuyers out of the market,” CNN stated. “February’s reversal in sales also ended the longest streak of month-to-month declining home sales on record, going back to 1999 for all homes and 1968 for single-family homes.”
All of this is coming as mortgage rates remain volatile, having risen approximately 50 basis points during February.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said Yun. “We’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”