Quarterly Home Price Appreciation (Annualized)
Typically, home price appreciation rates are calculated on a Year-Over-Year (YoY) basis. This longer time frame ‘smoothes out’ month-to-month and seasonal fluctuations but can hide important market changes.
For ex: If home prices increased 5% in each of the first 3 quarters, then declined 15% in the last quarter, ANNUAL appreciation would be zero and the 15% decline in the last quarter would not be apparent. The severe decline in the last quarter was averaged away in the annual number!
QUARTERLY home price appreciation rates are calculated by comparing current prices with those of three months earlier. This percentage rate is then multiplied by four (or ‘annualized’) to make it comparable with other annual-based figures.
For very volatile or seasonal markets where the blue line moves up and down a lot intra-year, try using the green Moving Average line to spot the bigger trend.
