Black Knight: Home Prices Set Yet Another Record in August, Pushing Annual Growth Rate Sharply Higher
(Courtesy Black Knight)
Home prices rose an “exceptionally strong” seasonally adjusted 0.68% in August, according to Black Knight’s ICE Mortgage Monitor Report.
August’s non-adjusted gain of 0.24% was more than 60% larger than the 25-year same-month average of 0.15%, the report said.
Along with a lower starting point due to late-2022 price drops, August’s increase was enough to push the annual rate of home price growth to 3.8%, up from 2.4% in July and just 0.25% in May, the report said.
“After essentially flattening earlier this year, year-over-year home price growth has been reaccelerating for the last few months,” ICE Vice President of Enterprise Research Andy Walden said. “Growth remained strong in August, with home prices up a seasonally adjusted 0.68% from July hitting yet another record high for the fourth consecutive month.”
Walden called growth widespread, as well. “Prices in nearly half of the nation’s 50 largest markets climbed by 0.75% or more, even on a non-adjusted basis…Either way you look at it, the increase was sufficient to push annual appreciation up to a stronger-than-expected 3.8%.”
August’s results mark three months of clear acceleration in the rate of growth at the national level, the report said. Likewise, August marked the second consecutive month in which annual HPA trended higher in every one of the 50 largest U.S. markets, mirroring the sharp reacceleration we’re seeing at the national level.
“Already baked-in price gains mean further acceleration may be on the horizon,” Walden said. “If adjusted home prices were to freeze where they are now, it would result in annual home price appreciation rising above 5% by year’s end given the strong price increases seen earlier this year.”
“On the other hand, if the 0.64% per month seasonally adjusted price increases we’ve seen on average in 2023 were to continue, we’d be looking at nearly 8% year-over-year growth by December,” Walden noted. “All that said, closed sales from August would have typically gone under contract in July, when mortgage rates were 40 to 50 basis points lower than today. As it stands, home affordability hit yet another 38-year low in September by way of spiking rates and prices, both of which could still serve to cool price gains as we move toward the end of the year.”
