Home Price Growth Slows but Remains Robust

Rhea-AI Summary

Fannie Mae's latest Home Price Index (FNM-HPI) shows single-family home prices increased 5.9% year-over-year in Q3 2024, decelerating from the previous quarter's 6.4% growth. Quarterly, prices rose a seasonally adjusted 1.3%, down from 1.4% in Q2. The non-seasonally adjusted increase was 0.9% in Q3.

Mark Palim, Fannie Mae's Chief Economist, noted that home price growth remained robust due to weak housing supply, particularly in existing homes. Despite lower mortgage rates, home purchase activity remained constrained by the 'lock-in effect' and affordability issues. In September, high home prices surpassed high mortgage rates as the top reason for pessimism toward homebuying conditions.

The FNM-HPI, a national repeat-transaction index, is available quarterly from Q1 1975 to Q3 2024, providing insights into single-family home price trends across the United States.

Positive

• Single-family home prices increased 5.9% year-over-year in Q3 2024
• Quarterly home prices rose 1.3% on a seasonally adjusted basis
• Home price growth remains robust despite slight deceleration

Negative

• Home price growth decelerated from 6.4% in Q2 to 5.9% in Q3 2024
• Home purchase activity remained constrained by 'lock-in effect' and affordability issues
• High home prices became the top reason for consumer pessimism toward homebuying conditions

Latest FNM-HPI Reading Showed Year-over-Year Increase of 5.9 Percent in Q3 2024

WASHINGTON, Oct. 15, 2024 /PRNewswire/ -- Single-family home prices increased 5.9 percent from Q3 2023 to Q3 2024, a deceleration compared to the previous quarter's downwardly revised annual growth rate of 6.4 percent, according to the latest reading of the Fannie Mae (OTCQB: FNMA) Home Price Index (FNM-HPI). The FNM-HPI 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. On a quarterly basis, home prices rose a seasonally adjusted 1.3 percent in Q3 2024, down from the revised 1.4 percent growth in Q2 2024. On a non-seasonally adjusted basis, home prices increased by 0.9 percent in Q3 2024.

"Despite decelerating slightly, home price growth remained robust in the third quarter, as the supply of homes for sale, particularly on the existing side, remained weak relative to historical levels," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "Even though mortgage rates fell precipitously in the third quarter, and we saw some improvements to the months' supply of homes for sale, home purchase activity barely budged – at least on a national basis – which we view as evidence that the market remains significantly constrained by both the 'lock-in effect' and affordability generally, but especially elevated home prices. In fact, consumers have told us as much: In September, high home prices supplanted high mortgage rates as the top reason for our survey respondents' overwhelming pessimism toward homebuying conditions. Overall, the strength of this latest home price reading confirms the ongoing challenges with tight supply; however, the index's continued deceleration shows that we're slowly moving toward a better balance between supply and demand."

The FNM-HPI 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 FNM-HPI is publicly available at the national level as a quarterly series with a start date of Q1 1975 and extending to the most recent quarter, Q3 2024. Fannie Mae publishes the FNM-HPI approximately mid-month during the first month of each new quarter.

For more information on the FNM-HPI, including a description of the methodology and the Q3 2024 data file, please visit our Research & Insights page on fanniemae.com.

To receive e-mail updates regarding future FNM-HPI updates and other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.

Fannie Mae's home price estimates are based on preliminary data available as of the date of index estimation and are subject to change as additional data become available. Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management. 

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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https://www.fanniemae.com/news

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SOURCE Fannie Mae

FAQ

What was the year-over-year home price increase for Fannie Mae (FNMA) in Q3 2024?

According to the Fannie Mae Home Price Index (FNM-HPI), single-family home prices increased 5.9% year-over-year in Q3 2024.

How did Fannie Mae's (FNMA) Q3 2024 home price growth compare to the previous quarter?

The 5.9% year-over-year increase in Q3 2024 showed a deceleration compared to the previous quarter's downwardly revised annual growth rate of 6.4%.

What was the quarterly home price increase for Fannie Mae (FNMA) in Q3 2024?

On a quarterly basis, home prices rose a seasonally adjusted 1.3% in Q3 2024, down from the revised 1.4% growth in Q2 2024.

What factors contributed to the robust home price growth for Fannie Mae (FNMA) in Q3 2024?

According to Fannie Mae's Chief Economist, home price growth remained robust due to weak housing supply, particularly in existing homes, despite lower mortgage rates and slight improvements in the months' supply of homes for sale.