Price Growth Slows Further in August, First American Reports

(Image courtesy of Robert So/pexels.com)

House price growth slowed further in August, offering some relief for buyers, First American Data & Analytics said in its Monthly Home Price Index Report.

Annual house price appreciation dipped to the slowest rate since February 2012, the report said. In addition, First American revised the price growth reported in last month’s HPI downward by 0.1 percentage points, from -0.2 percent to -0.3 percent.

“House price growth nationally slowed further in August, dropping to the slowest pace since 2012 and signaling a shift toward a more balanced market after the rapid price acceleration during the pandemic,” said Mark Fleming, chief economist at First American. “For prospective buyers, this slowdown offers a welcome breather as incomes outpace house price growth and mortgage rates ease to their lowest level of the year.”

But homeowners still have record levels of equity, Fleming added. Cumulative price appreciation since early 2020 is still up 56 percent.

Fleming noted the result is more opportunities for buyers to get in the market, “especially existing homeowners looking to tap their significant equity gains.”

Affordability constraints are shaping price dynamics across market segments, Fleming concluded. “When averaging across the top 30 markets we track, annual price growth has been softest in the starter-home tier, while the luxury segment has outperformed,” he said. “In an environment where higher mortgage rates weigh heavily on first-time buyers, luxury buyers–often less affected by the rate ‘lock-in’ effect because they can pay in cash or leverage equity from a previous home sale–are driving stronger appreciation at the top end of the market.”