FHFA: U.S. House Prices Rise 5.5% Over the Last Year

FHFA: U.S. House Prices Rise 5.5% Over the Last Year

U.S. house prices rose 5.5 percent between September 2022 and September 2023, according to the Federal Housing Finance Agency’s House Price Index report released Tuesday.

FHFA said house prices were up 2.1 percent at the end of September compared to the second quarter of 2023. FHFA’s seasonally adjusted monthly index for September was up 0.6 percent from August.

“U.S. house price growth continued to accelerate in the third quarter, appreciating more than in each of the previous four quarters,” said Anju Vajja, principal associate director in FHFA’s Division of Research and Statistics. “House prices rose in the third quarter in all census divisions and are higher than one year ago, driven primarily by a low supply of homes for sale.”

In a separate report also released Tuesday, the U.S. CoreLogic S&P Case-Shiller Index increased by 3.9% year over year in September, the third month of annual increases following two months of annual declines. With the rebound in appreciation this year, home prices are now up by 1.3% compared with the June 2022 peak and up by 6.6% from the January 2023 bottom, the report said.

“U.S. home prices continued their rally in September 2023,” said Craig Lazzara, managing director at S&P DJI. “Although this year’s increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices. Unless higher rates or exogenous events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

Data from CoreLogic’s latest Home Price Index projects U.S. home price growth will reach 5.4% by December before slowing down and will average a 3.8% increase this year compared with last year. “High mortgage rates, which are expected to remain above 7% through the middle of 2024, will dampen further appreciation, which is projected to average 3% in 2024,” CoreLogic said.