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Home Price Growth Decelerated in the Third Quarter

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FNM-HPI Measured Annual Home Price Growth of 13.8 Percent in Q3 2022

Washington, D.C. – Oct. 17, 2022 (PRNewswire) Single-family home prices increased at a non-seasonally adjusted annual rate of 13.8 percent in Q3 2022, down from the previous quarter’s revised 19.1 percent, according to Fannie Mae’s (OTCQB: FNMA) latest Home Price Index (FNM-HPI) reading, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. On a quarterly basis, home prices rose a seasonally adjusted 0.2 percent in Q3 2022, the slowest quarter of growth since Q4 2011. On a non-seasonally adjusted basis, home prices declined by 0.2 percent in Q3 2022.

“Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “In addition to the greater affordability constraints for potential homebuyers, many existing homeowners likely feel ‘locked-in’ to their existing, lower interest-rate mortgages. This contributes to fewer homes being listed, as well as fewer potential buyers, and may lead to a growing share of listings having to cut prices to meet the reduced demand. Furthermore, the supply of completed, new single-family homes for sale has begun to rise, suggesting that homebuilders may also need to begin offering greater price concessions to move inventory. We expect these trends to continue in the coming months.”

The FNM-HPI is produced by aggregating county-level data to create both seasonally adjusted and non-seasonally adjusted national indices that are representative of the whole country and designed to serve as indicators of general single-family home price trends. The FNM-HPI is publicly available at the national level as a quarterly series with a start date of Q1 1975 and extending to the most recent quarter, Q3 2022. Fannie Mae publishes the FNM-HPI approximately mid-month during the first month of each new quarter.

For more information on the FNM-HPI, including a description of the methodology and the Q3 2022 data file, please visit our Research & Insights page on fanniemae.com.

To receive e-mail updates regarding future FNM-HPI updates and other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

Fannie Mae’s home price estimates are based on preliminary data available as of the date of index estimation and are subject to change as additional data become available. Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

About the ESR Group
Fannie Mae’s Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was recently awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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https://www.fanniemae.com/news

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SOURCE Fannie Mae

U.S. House Prices Continue to Soar

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Source: Statista

Low mortgage interest rates driving up prices, demand outstripping supply due to material shortages, increased competition by investors: The U.S. housing market is becoming increasingly inaccessible to regular people wanting to buy their own single-family home. As our chart based on data from the S&P CoreLogic Case-Shiller U.S. National Home Price Index shows, prices in this housing segment have reached an all-time high.

In December 2021, the index rose to 278.63 points, the highest since its inaugural year of 1987. This marks an increase of 178 percent since January 2000 and of roughly 19 percent since December 2020. The reasons for this are, as already hinted at, manifold. For example, a recent survey conducted by the National Alliance of Home Builders showed that 96 percent of participants saw high prices for building materials as a significant problem in 2021, with 91 percent claiming that this issue will continue throughout 2022.

This, in turn, leads to a backlog in construction, which mostly affects single-family units. According to data from the U.S. Census Bureau, the number of houses in this segment that were authorized but hadn’t started construction yet stood at 152,000 in October 2021 alone, the highest figure since August 2006. Other factors in play include global and national investors flooding the market as well as the rise of iBuying, where companies use dedicated algorithms to estimate a house’s value and instantly buy it in cash, skirting mortgage issues and the majority of the market as a whole.

While pressure might ease on some fronts as the coronavirus pandemic becomes endemic in the next couple of years, the core problems will persist. “It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution, in an interview with The New York Times. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.” This demand not only influences housing prices in general but the share of higher-cost single-family units as well. According to the U.S. Census Bureau, the average price for a family home stood at $391,900 in 2020, with the market share of houses selling for more than $400,000 amounting to 34 percent in that year.

Florian Zandt

Florian ZandtData Journalistflorian.zandt@statista.com

Infographic: U.S. House Prices Continue to Soar | Statista

New Homes in the U.S. Grow Pricier

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Source: Statista

New single-family homes built and sold in the U.S. are growing increasingly pricey. While in 2002, the average price of such a home was $228,700, that had increased to $391,900 in 2020. Meanwhile, consumer prices for city dweller rose by 42 percent in the same time frame, making the average 2020 home $67,000 pricier than its 2002 counterpart after adjusting for inflation.

The segment of expensive houses costing more than $400,000 each accounted for only 9 percent of new homes sold in the U.S. in 2002. In 2020, the segment had grown to 34 percent. The share of houses costing less than $150,000 decreased during this time from 30 percent to just 1 percent, according to the Census Bureau.

The financial crisis and the U.S. housing bubble saw the number of affordable new homes in the U.S. rise again in 2008 and 2009, but only momentarily. Buyers have been shelling out more over the years for the same standard houses, but at the same time, the average new house has also grown larger and more luxurious with more space and more amenities translating to bigger price tags.

Infographic: New Homes in the U.S. Grow Pricier | Statista