Single-family home prices increased 7.1% in the fourth quarter compared with the fourth quarter of 2022, according to Fannie Mae’s home price index.
That’s up from the previous quarter’s revised annual growth rate of 5.1%.
However, the rate of home price appreciation slowed in the fourth quarter, the report shows.
Compared with the third quarter, home prices rose a seasonally adjusted 1.7%, a deceleration from 2.1% growth in the third quarter.
On a non-adjusted basis, home prices increased 0.4% in the fourth quarter.
“In the current supply-constrained housing market, any changes to the fundamentals of affordability are going to affect demand, and we saw this in the fourth quarter with interest rates peaking near 8 percent and helping further slow home price growth,” says Doug Duncan, senior vice president and chief economist for Fannie Mae, in the report. “Of course, the fourth quarter is also typically the slowest of the year in terms of housing activity and purchase demand, so seasonality should be taken into account, as well.”
“For the year, housing demand held up surprisingly well, in large part due to ongoing demographic support – Millennials continue to drive demand in many areas – and generally strong household finances,” Duncan adds.
Photo: Ian MacDonald