House Prices Lose Momentum
Well, it's not just my imagination: today I was reading that the latest major housing market report shows home price appreciation is shrinking at a rate not seen since 1975. In other words, if you are used to seeing your home go up by double digit percentages, that trend is coming to an end.
The Office of Federal Housing Enterprise Oversight's Home Price Index shows that home prices overall are up about 10 percent since last year. While a healthy increase, that level of price change is growing smaller: this year, the appreciation was only just over 1 percent from the first quarter to the second, which means that the yearly growth should be between 4 and 5 percent. That's a far cry from the kinds of increases of the past few years.
This is more bad news for those who want to house-flip their way to wealth. (If you are a night hawk like me, you'll have noticed that all the informercials for those "get rich by real estate" schemes are becoming harder to find.) I'd say the balance is definitely tipping towards the "buy and hold" strategy that is most often recommended in other areas of investment -- like stocks.
Still, if you are a buyer and trying to get into the market, this is good news for you. You may even see some price softening in some areas, making homes more affordable for those buying for the first time.
We've had some unexpected expenses here, so the basement renovation has been put on hold. Maybe we'll be able to afford a new place instead.
Just in case, I'm going out today to take a look at a place.