Fannie Mae: Home Price Growth Slows, Remains Robust

(Illustration courtesy of Fannie Mae)

Single-family house prices increased 5.9% from third-quarter 2023 to third-quarter 2024, a deceleration from the previous quarter’s 6.4% annual growth rate, according to Fannie Mae, Washington, D.C.

The Fannie Mae Home Price Index is a repeat-transaction home price index that measures the average quarterly price change for all single-family properties in the United States, excluding condominiums. On a quarterly basis, home prices rose a seasonally adjusted 1.3% in the third quarter, down from 1.4% growth in the second quarter. On a non-seasonally adjusted basis, home prices increased by 0.9% in the quarter.

“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,” Fannie Mae Senior Vice President and Chief Economist Mark Palim said. “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.”

Palim noted consumers have indicated just that. “In September, high home prices supplanted high mortgage rates as the top reason for our survey respondents’ overwhelming pessimism toward homebuying conditions,” he said. “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.”