Single-family home prices increased at a non-seasonally adjusted annual rate of 4.7 percent from Q1 2022 to Q1 2023, down from the previous quarter’s revised annual growth rate of 8.6 percent, according to Fannie Mae’s latest Home Price Index.
On a quarterly basis, home prices rose a seasonally adjusted 1.0 percent in Q1 2023, above the 0.0 percent growth seen in the prior quarter. On a non-seasonally adjusted basis, home prices also increased by 1.0 percent in Q1 2023.
“As expected, the annual rate of increase in home prices has slowed dramatically in response to the rapid and significant increase in interest rates,” says Fannie Mae’s Doug Duncan. “Still, the fact that prices rose slightly in the first quarter is evidence of significant pent-up mortgage demand, despite ongoing affordability constraints.
“Even though mortgage rates remain elevated compared to the previous few years, the acute lack of housing supply remains supportive of home prices,” he adds. “Of course, the shortage of homes for sale is currently being exacerbated by the so-called ‘lock-in effect,’ which continues to disincentivize huge numbers of households with low mortgage rates from listing their homes.”