Annual House Price Growth Nears Return to Historical Norms Nationally, According to First American Data & Analytics Monthly Home Price Index Report

Rhea-AI Summary

First American Data & Analytics released its August 2024 Home Price Index (HPI) report, showing annual house price growth slowing for the eighth consecutive month, approaching pre-pandemic norms. Key findings include:

- National house prices are 54.5% higher than pre-pandemic levels
- August 2023-August 2024 year-over-year increase: 4.5%
- July-August 2024 month-over-month increase: 0.1%

Chief Economist Mark Fleming notes that sluggish demand and increasing supply are cooling price appreciation. Despite affordability challenges, first-time buyer demand remains resilient, with positive annual price growth in the starter home tier in 25 of 30 top markets. Anaheim, Cambridge, Seattle, Miami, and Warren saw the highest year-over-year HPI increases, while Oakland and Tampa experienced decreases.

—Supply and Demand Dynamics Favor Ongoing House Price Slowdown, Even as Mortgage Rates Fall, says Chief Economist Mark Fleming—

SANTA ANA, Calif.--(BUSINESS WIRE)-- First American Data & Analytics, a leading national provider of property-centric information, risk management and valuation solutions and a division of First American Financial Corporation (NYSE: FAF), today released its August 2024 Home Price Index (HPI) report. The report tracks home price changes less than four weeks behind real time at the national, state and metropolitan (Core-Based Statistical Area) levels and includes metropolitan price tiers that segment sale transactions into starter, mid and luxury tiers. The full report can be found here.

August¹ National House Price Index

First American Data & Analytics’ National Non-Seasonally Adjusted (NSA) HPI
Metric	Change in HPI
July-August 2024 (month over month)	+0.1 percent
August 2023-August 2024 (year over year)	+4.5 percent

Highlights

• House prices nationally are now 54.5 percent higher compared to pre-pandemic levels (February 2020).
• House price growth reported in last month’s HPI for June 2024 to July 2024 was revised down 0.2 percentage points, from 0.3 percent to 0.1 percent.

Chief Economist Analysis:

“Annual house price appreciation nationally slowed for the eighth consecutive month, inching closer to the pre-pandemic historical average of approximately 3.5 percent. Housing demand remains strained under the pressure of elevated mortgage rates and high prices, while for-sale inventory has increased compared to last year. Sluggish demand combined with increasing supply is a recipe for cooling home price appreciation,” said Mark Fleming, chief economist at First American. “The key question moving forward is whether the recent, and potentially ongoing, downward trend in mortgage rates fueled by the Fed’s widely expected interest rate cut will be enough to bring buyers off the sidelines. But most buyers are also sellers, and they will remain significantly rate locked-in by their current low-rate mortgages, so modestly lower rates may not spur significant numbers of buyers into the market.”

August 2024 Local Market Price Tier Highlights

The First American Data & Analytics HPI segments home price changes at the metropolitan level into three price tiers based on local market sales data: starter tier, which represents home sales prices at the bottom third of the market price distribution; mid-tier, which represents home sales prices in the middle third of the market price distribution; and the luxury tier, which represents home sales prices in the top third of the market price distribution.

“Potential first-time home buyers suffer the most from affordability challenges, as they lack the equity from an existing home to bring to the closing table. Yet, first-time home buyer demand appears to be resilient, since annual price growth in the starter home price tier remained positive in 25 of the top 30 markets we track in August,” said Fleming. “Notably, many of the top markets for growth in starter home prices are those that are relatively more affordable, such as Pittsburgh, Baltimore and St. Louis.”

August 2024 First American Data & Analytics Price Tier HPI Highlights

Core-Based Statistical Areas (CBSAs) Ranked by Greatest Year-Over-Year Increases in Starter Tier HPI
CBSA	Change in Starter Tier HPI	Change in Mid-Tier HPI	Change in Luxury Tier HPI
Warren, Mich.	+9.0 percent	+4.9 percent	+5.1 percent
Cambridge, Mass.	+8.9 percent	+5.2 percent	+6.3 percent
St. Louis	+8.8 percent	+3.8 percent	+3.4 percent
Pittsburgh	+8.4 percent	+5.7 percent	+4.2 percent
Baltimore	+7.0 percent	+6.7 percent	+5.7 percent

Additional August 2024 First American Data & Analytics HPI Highlights

Core-Based Statistical Areas (CBSAs) with Greatest Year-Over-Year Increases in HPI
CBSA	Change in HPI
Anaheim, Calif.	+8.5 percent
Cambridge, Mass	+6.8 percent
Seattle	+6.2 percent
Miami	+6.2 percent
Warren, Mich.	+6.2 percent
Core-Based Statistical Areas (CBSAs) with a Year-Over-Year Decrease in HPI
Oakland, Calif.	-4.1 percent
Tampa, Fla.	-1.6 percent

HPI data for all 50 states and the largest 30 CBSAs by population is available here.

Visit the First American Economic Center for more research on housing market dynamics.

Next Release

The next release of the First American Data & Analytics House Price Index will take place the week of October 14, 2024.

First American Data & Analytics HPI Methodology

The First American Data & Analytics HPI report measures single-family home prices, including distressed sales, with indices updated monthly beginning in 1980 through the month of the current report. HPI data is provided at the national, state and CBSA levels and includes preliminary index estimates for the month prior to the report (i.e. the preliminary result of July transactions is reported in August). The most recent index results are subject to revision as data from more transactions become available.

The HPI uses a repeat-sales methodology, which measures price changes for the same property over time using more than 46 million paired transactions to generate the indices. In non-disclosure states, the HPI utilizes a combination of public sales records, MLS sold and active listings, and appraisal data to estimate house prices. This comprehensive approach is particularly effective in areas where there is limited availability of accurate sale prices, such as non-disclosure states. Property type, price and location data are used to create more refined market segment indices. Real Estate-Owned transactions are not included.

Disclaimer

Opinions, estimates, forecasts and other views contained in this page are those of First American’s Chief Economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American’s business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2024 by First American. Information from this page may be used with proper attribution.

About First American Data & Analytics

First American Data & Analytics, a division of First American Financial Corporation, is a national provider of property-centric information, risk management and valuation solutions. First American maintains and curates the industry’s largest property and ownership dataset that includes more than 8 billion document images. Its major platforms and products include: DataTree^®, FraudGuard^®, RegsData^®, First American TaxSource™ and ACI^®. Find out more about how First American Data & Analytics powers the real estate, mortgage and title settlement services industries with advanced decisioning solutions at www.FirstAmDNA.com.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 135 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $6.0 billion in 2023, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2024, First American was named one of the 100 Best Companies to Work For by Great Place to Work^® and Fortune Magazine for the ninth consecutive year, and named one of the 100 Best Workplaces for Innovators by Fast Company for the second consecutive year. More information about the company can be found at www.firstam.com.

¹ The most recent index results are subject to revision as data from more transactions become available.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919154404/en/

Media Contact:

Marcus Ginnaty

Corporate Communications

First American Financial Corporation

(714) 250-3298

Investor Contact:

Craig Barberio

Investor Relations

First American Financial Corporation

(714) 250-5214

Source: First American Data & Analytics

FAQ

What was the year-over-year house price increase in August 2024 according to First American's HPI report?

According to First American's HPI report, the year-over-year house price increase from August 2023 to August 2024 was 4.5%.

How much higher are house prices compared to pre-pandemic levels in August 2024?

House prices nationally are 54.5% higher compared to pre-pandemic levels (February 2020) as of August 2024.

Which cities saw the highest year-over-year increases in HPI according to the August 2024 report?

The cities with the highest year-over-year increases in HPI were Anaheim (8.5%), Cambridge (6.8%), Seattle (6.2%), Miami (6.2%), and Warren (6.2%).

Did any cities experience a decrease in HPI according to First American's August 2024 report?

Yes, two cities experienced a year-over-year decrease in HPI: Oakland, California (-4.1%) and Tampa, Florida (-1.6%).

What factors are contributing to the cooling of home price appreciation according to First American's chief economist?

According to Mark Fleming, First American's chief economist, sluggish demand combined with increasing supply is contributing to the cooling of home price appreciation.