First American’s Home Price Index Up 7.6% YoY

(Courtesy First American)

House prices increased 0.3 percent between October and November, according to First American Data & Analytics’ non-seasonally adjusted Home Price Index.

House prices increased 7.6 percent between November 2022 and November 2023 and reached a new peak for the eighth month in a row in November, the report said.

“The October spike in mortgage rates thankfully retreated in November, providing an affordability boost to prospective buyers and fueling home price appreciation. Preliminary November results indicate that home prices increased for the eighth consecutive month,” said Mark Fleming, chief economist at First American

Fleming noted homeowners are reluctant to sell at the moment, which is keeping upward pressure on prices. “However, the new year offers hope to discouraged buyers as sellers’ anchor bias to historically low mortgage rates fades and the potential for slightly lower mortgage rates further improves affordability,” he said.

First American reported the five most populous states experienced the following year-over-year growth in its House Price Index: Pennsylvania (+8.7 percent), Florida (+5.5 percent), California (+4.5 percent), Texas (+4.3 percent) and New York (+2.2 percent). There were no states with a year-over-year decrease in the index.

“Unsurprisingly, starter home prices grew the fastest in many markets. Would be first-time buyers hoping to become homeowners usually do so with a lower-priced starter home,” said Fleming. “While the homeownership rate for millennials recently surpassed 50 percent, there are still a lot of potential buyers bidding against each other for the rare starter home that comes to market.”