Single-family home prices increased at a non-seasonally adjusted annual rate of 13.8% in Q3 2022, down from the previous quarter’s revised 19.1%, according to Fannie Mae’s latest Home Price Index (FNM-HPI) reading.
The FNM-HPI, as stated by Fannie Mae, is a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. It 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 report found that on a quarterly basis, home prices rose a seasonally adjusted 0.2% in Q3 2022, the slowest quarter of growth since Q4 2011. On a non-seasonally adjusted basis, home prices declined by 0.2% 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.”
Continued Duncan, “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.”
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