When Will Housing Prices Drop?

Home prices are down month-over-month but still up year-over-year annually. Here's what you should know about home prices and the other ways they can change. 

For just about any homeowner, talk of falling housing prices can spark panic. With homeownership being the major financial and personal investment it is, there's a natural anxiety that comes with any potential threat to that investment.

However, housing market activity to date does not show a year-over-year decline of home prices on a national scale – at least not yet. While some data sets show month-to-month home price declines, month-to-month data is more volatile and does not signal a drastic shift in the market on its own.

There is a marked deceleration in home price growth due to a combination of already high home prices, high mortgage interest rates, low housing inventory and economic uncertainty on a larger scale. Many would-be homebuyers are simply opting out of a purchase now.

As a result, properties on the market sit a bit longer, and sellers are dropping their asking prices more often than during the previous two years, when buyer activity was red-hot and dropping a listing price was almost unheard of.