Fannie Mae: 2Q Home Prices Down from Record High

Fannie Mae, Washington, D.C., said single-family home prices increased at the annualized rate of 19.4 percent in the second quarter–down slightly from the previous quarter’s upwardly revised 20.5 percent, but still at a highly elevated pace.

The Fannie Mae Home Price Index said on a quarterly basis, home prices rose a seasonally adjusted 4.3 percent.

“Home prices maintained a near-historic pace of appreciation in the second quarter, as low levels of housing inventory continued to support price growth,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “At the end of 2021 and extending into 2022, we believe many homebuyers pulled forward their purchase plans to avoid expected increases in mortgage rates, contributing to demand for homes and strong price appreciation.

Duncan said given the sharp rise in mortgage rates since that time, and the resulting negative impact on affordability to potential homebuyers, “we expect purchase demand to cool in the quarters ahead, and for home price appreciation to moderate as a result.”