Current State of the Housing Market; Overview for mid-January

The YoY change in the median price peaked at 25.2% in May 2021 and has now slowed to 3.5%. In general, the NAR median price leads the Case-Shiller index by 2 to 3 months. Note that the median price usually starts falling seasonally in July, so the 2.1% decline in November in the median price was partially seasonal, however the 10.4% decline over the last five months has been much larger than the usual seasonal decline.

It is likely the median price will be down year-over-year in a few months – and Case-Shiller will follow. I’m now forecasting a 10%+ decline in nominal house prices, see: House Prices: 7 Years in Purgatory.
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On Friday, January 20th, the NAR will release existing home sales for December. This report will likely show another sharp year-over-year decline in sales for December, similar to the YoY decline in November. … If national sales decline by the same percent as last month, the NAR will report sales for December under 4.0 million SAAR – below the 4.01 million in May 2020 (pandemic low) and the lowest sales rate since 2010.