Have home values officially hit their bottom? It’s one of the topics that host Byron Lazine discussed in depth this week. Your Hot Sheet recap covers home value data from CoreLogic and Zillow, as well as property tax increases across the U.S., cooling inflation amid high housing costs, and first-time homebuyer optimism.
Dive in below for some of this week’s highlights.
Property Taxes are on the Rise Across the U.S.
While increasing property taxes are another affordability hurdle in the short term, they have the potential to create more housing inventory. And we all know how much we need more inventory.
A new ATTOM report shows a 3.6% annual increase in property taxes. And with property values going up over 40% over the past couple of years, there may be another significant increase in property taxes in 2023.
As an agent, help your buyers factor in every aspect of their monthly payment—including property taxes. Zillow’s newest feature aims to help consumers search based on a monthly payment on their own, so long as all the inputted information is correct.
Watch the breakdown of property taxes here.
Inflation Cools—But Housing Costs Remain High
On Wednesday, the CPI report for March was released, showing that inflation is cooling compared to a year ago, with the smallest annual increase since May 2021. The CPI year-over-year index was 5% in March, slightly better than the expected 5.1%.
However, housing remains the largest contributor to the monthly increase, offsetting a decline in the energy index. The shelter index increased 0.6% in March, following a 0.8% increase in February.
Watch the full breakdown of the latest CPI numbers here.
Have home values hit bottom?
CoreLogic Data
This week, two pieces of data were released, each hinting that home prices may have bottomed out. Host Byron Lazine first discussed this on Wednesday with a Fortune article reviewing CoreLogic’s numbers.
According to CoreLogic, home prices increased for the first time after seven months of decline. And prices may not just be stabilizing but on the upward swing once again. In fact, CoreLogic’s home price forecast shows prices rising back up to their 2022 peak by the end of 2023.
Watch the full breakdown of the CoreLogic data here.
Zillow Home Values Index
In addition, Zillow data supports the claim that home prices have already hit their low mark, as Byron discussed on Thursday.
According to the Zillow Home Values Index, the average home value in the U.S. is $334,269, up 5% over the past year. Looking back to last month, the average home value was $327,514. This shows a month-over-month increase after several months of decline.
Looking ahead, Zillow expects a 1.9% increase in home values over the next year. Keep in mind, even though we may see a year-over-year increase at this time next year, we may still see some month-over-month declines in the second half of 2023 (similar to what we saw in 2022).
Watch the full breakdown of Zillow’s home value data here.
First-Time Homebuyers Remain Optimistic
Despite all the hurdles thrown their way, many first-time homebuyers remain optimistic about today’s market. A recent TD Bank survey found that 39% of first-time buyers believe now is a good time to buy, with rising rents pushing more into thinking about the long-term wealth gains of homeownership.
Of course, consumers don’t have access to all of the data that you have as an agent. For those who remain on the fence about homeownership (or are frustrated by low inventory), continue to educate and add value. Provide information like the CoreLogic and Zillow forecasts above, which show that home prices may have already hit their bottom—and work to help them find a property that will fit their monthly budget.
Watch the full breakdown of the TD Bank survey on first-time homebuyers here.
For a full Hot Sheet recap look back at this week’s episodes.
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