According to Fannie Mae’s latest Home Price Index (FNM-HPI) reading, single-family home prices increased 3% from the second quarter of 2022 to the second quarter of 2023, down from the previous quarter’s revised annual growth rate of 4.9%.
On a quarterly basis, home prices rose a seasonally adjusted 1.9% in the second quarter of 2023, acceleration from 1.3% growth in the first quarter. On a non-seasonally adjusted basis, home prices increased by 3.6% the second quarter of 2023.
“The ‘lock-in effect,’ in which homeowners are disincentivized to list their homes for sale because of how high mortgage rates have risen, is seriously inhibiting the supply of existing homes available for sale,” says Doug Duncan, Fannie Mae senior vice president and chief economist. “At nearly 8% on a seasonally adjusted annualized basis, this past quarter’s home price growth was well above the historical average.”
“One consequence of the stronger home price environment is that new home construction is well-supported,” he adds. “Unfortunately, any hopes of a better-balanced home supply situation may rest on the ability of homebuilders to meet ongoing demand.”