What Does Year-Over-Year (YOY) Mean in Real Estate?

Year-over-year (YOY) analysis evaluates changes in metrics by comparing data from a specific period with the same period in the previous year. This approach helps understand underlying trends, showing whether an aspect is growing, declining, or stable.

Understanding Year-Over-Year

Year-over-year refers to comparing a specific period, like a month or quarter, with the identical period in the preceding year. This method helps to normalize data by smoothing out seasonal variations that can otherwise obscure true trends. For example, comparing retail sales in December 2024 to December 2023 provides a more accurate picture of growth than comparing December 2024 to November 2024, as holiday shopping boosts December sales. YOY calculations involve taking the current period’s value, subtracting the prior year’s value for the same period, dividing by the prior year’s value, and then multiplying by 100 for a percentage. This comparison helps to assess performance and identify whether a metric is improving, static, or declining over a longer duration.

The primary purpose of YOY analysis is to provide an “apples-to-apples” comparison that accounts for cyclical patterns or seasonal demand. For instance, comparing a business’s Spring 2025 performance to Spring 2024 offers more meaningful insights than comparing it to Winter 2025. This approach makes it easier to spot genuine trends by filtering out short-term fluctuations influenced by predictable seasonal shifts.

Key Real Estate Metrics Using YOY

YOY analysis is widely applied to various real estate metrics to understand market dynamics and property performance. It helps in assessing market health and potential investment returns.

Median Home Prices

Median home prices often utilize YOY comparisons to show appreciation or depreciation in property values. For instance, if the median sale price in an area increased by 7% YOY, it indicates a robust growth in the local market. Currently, U.S. home prices saw a modest increase of about 1.0% YOY as of June 2025, with a median price around $446,766. This metric is preferred over average prices because it is less susceptible to being skewed by a few extremely high-value or low-value property sales, providing a more representative view of the market.

Sales Volume

Sales volume, which measures the number of homes sold, is another metric frequently analyzed YOY to gauge market activity. A YOY increase in sales volume suggests a more active market, while a decrease can indicate cooling demand. In June 2025, the number of homes sold in the U.S. rose by approximately 4.1% YOY. This data helps to assess the overall transaction levels and buyer engagement within the market.

New Listings and Inventory Levels

New listings and inventory levels are important for YOY analysis, reflecting supply dynamics. An increase in new listings YOY indicates more homes coming onto the market, potentially easing supply constraints. As of July 2025, active listings in the U.S. increased by about 24.8% YOY, marking continued growth in available homes. This trend suggests more options for buyers, shifting the market balance.

Rental Income or Rates

Rental income or rates are often examined YOY to assess the performance of rental properties. Consistent YOY growth in rental rates can indicate increasing demand for rental housing. For example, the average U.S. rent showed a 2.9% YOY change as of June 2025. This analysis helps landlords and investors understand the trajectory of their returns.

Time on Market

Time on market, or the median number of days a property remains for sale, provides insight into buyer urgency. A decrease in YOY time on market suggests homes are selling faster. In July 2025, homes spent a median of 58 days on the market, seven days longer than the previous year, indicating a slower pace of sales. This metric helps to understand how quickly properties are being absorbed by the market.

Analyzing YOY Trends

Interpreting YOY comparisons involves understanding what positive or negative percentages signify in the context of real estate. A positive YOY percentage generally indicates growth or improvement in a given metric, such as an increase in home prices or sales volume. Conversely, a negative YOY percentage suggests a decline or contraction, like a drop in new listings. These percentages provide a clear snapshot of change from one year to the next.

Consistent YOY changes over several periods can indicate stronger, more sustained trends. For example, if median home prices show a positive YOY increase for multiple consecutive quarters, it suggests a robust and appreciating market. Such sustained trends are more reliable indicators of market health and can inform decisions for buyers, sellers, and investors. However, YOY analysis should not be the sole basis for conclusions, as it may not fully capture broader economic cycles or sudden market shifts. It serves as a valuable tool for understanding historical performance and forecasting future possibilities.