Home prices across the United States continued to climb in August, although at a significantly slower rate than in prior months, rising at an annualized 12% from the prior month, according to the latest Home Price Index data released by homegenius Real Estate LLC last week. This marks the second consecutive month of slowing month-over-month appreciation, the report noted.
The homegenius HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types and geographies.
Key findings:
- After setting an all-time high for monthly appreciation at 18.8% in June 2022 (annualized), appreciation rates have slowed more than 35% from that peak.
- However, home price appreciation still remains well above historic averages.
- Median estimated home prices in the U.S. sit at $338,692.
- Home prices rose at an annualized rate of 16.7% year over year, 8% from February 2022 to August 2022, and 15.9% from June 2022 to August 2022.
- During August, price appreciation slowed to 12%, representing the slowest appreciation rate since March 2022 (11.3%).
- While that is a large decline from the prior month’s 16.5% appreciation, August home price appreciation matches the average monthly appreciation rate since the start of the pandemic, 30 months ago.
- During August, the Mid-Atlantic and Northeast markets were the strongest performers, while the West and South showed the strongest slowdown in appreciation.
- There were slightly more than 1.01 million properties listed for sale in August, which was the second-lowest level of inventory for any August over the last decade, and 40% lower than the average level of August listings over the last 15 years (1.4 million).
- Roughly 290,000 homes were purchased in August, in comparison to 278,000 in July. The last time a summer month (June, July, or August) reported less than 278,000 sales was in 2014.
- This year, the average sales per month in the summer months was 293,000. This makes 2022 an outlier in how quickly it has slowed in comparison to both historical levels and 2021, which set an all-time record for monthly buying activity.
- All 20 largest metro areas in the U.S. recorded slower annual price appreciation in August than in July.
- The largest decline was in San Francisco, which dropped to just 1.3% appreciation (annualized) in August.
- Los Angeles came in second with a 5.7% increase month-over-month.
- Cities in Texas and Florida fared the best of large metropolitan areas. Florida cities on both coasts recorded appreciation rates above 15% (Tampa 16.3%, Miami 16.5%) relative to the prior month.
- On average, the top 20 largest metros increased by 9.8 % in July. Over the last year, the average large metro increase was 12.6%.
The takeaway:
Pandemic-level appreciation rates were unsustainable and destined to revert to normal levels. However, shortage of inventory is prolonging these higher than usual appreciation rates and homegenius HPI has not seen inventory increases large enough to pressure home prices downward.
“Over the last two months, the impact of major increases in mortgage rates and inflation have finally been realized in the slowing rate of home price appreciation. It is once again clear that home prices are not impervious to the broader economic conditions around the country,” said Steve Gaenzler, SVP of Products, Data and Analytics for homegenius Real Estate. “However, the rate of appreciation is still well above the historical norm, at more than 12% month-over-month. While it is likely that appreciation rates will continue to drop, homeowners’ equity remains at all-time highs and inventory remains tight.”
For more information, visit www.homegenius.com.
