‘Higher-for-Longer’ Cools House Price Appreciation, According to First American Data & Analytics Monthly Home Price Index Report

Rhea-AI Summary

First American Data & Analytics released its April 2024 Home Price Index (HPI) report, revealing a 0.5% month-over-month increase and a 6.1% year-over-year rise in national home prices. National prices are now 53% higher than pre-pandemic levels. Chief Economist Mark Fleming noted that while the supply of existing homes has increased, higher mortgage rates have weakened affordability, reducing demand and cooling price appreciation. The report highlights significant price growth in starter homes, particularly in St. Louis, Miami, and Pittsburgh. Key metropolitan areas with notable year-over-year HPI increases include Anaheim, Miami, and San Diego.

Positive

• National home prices increased by 6.1% year-over-year.
• Month-over-month home prices rose by 0.5%.
• National home prices are 53% higher compared to pre-pandemic levels.
• Starter-tier home prices saw double-digit annualized price appreciation in St. Louis, Miami, and Pittsburgh.
• Anaheim and Miami saw significant year-over-year HPI increases of 10.2% and 9.5%, respectively.

Negative

• Affordability has weakened due to higher mortgage rates.
• Price appreciation is cooling as demand reduces.
• The month-over-month growth rate peaked in February at 1.3% and has since declined.

—Expect year-over-year price appreciation to follow this cooling trend in the months to come, 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 April 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.

April¹ National House Price Index

First American Data & Analytics’ National Non-Seasonally Adjusted (NSA) HPI
Metric	Change in HPI
March-April 2024 (month over month)	+0.5 percent
April 2023-April 2024 (year over year)	+6.1 percent

Highlights

• House prices nationally are now 53 percent higher compared to pre-pandemic levels (February 2020).
• House price growth reported in last month’s HPI for February 2024 to March 2024 was revised up 0.1 percentage points, from 0.9 percent to 1.0 percent.

Chief Economist Analysis:

“After years of historically low levels of homes for sale, the pace of existing-home listings has modestly increased, bringing much-needed supply to the housing market. However, just as inventory levels have increased, affordability has weakened as mortgage rates have drifted higher in response to the Fed’s decision to keep the federal funds rate ‘higher for longer,’ reducing demand,” said Mark Fleming, chief economist at First American. “More supply amid a pullback in demand means price appreciation is cooling. The month-over-month growth rate peaked in February at 1.3 percent, but has since cooled significantly. This supply-demand dynamic is likely to persist, so expect year-over-year price appreciation to follow this cooling trend in the months to come.”

April 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.

“Nationally, price appreciation for starter homes continues to outperform other price tiers. Given starter homes are the least supplied and the most demanded segment of the market, it’s no surprise that, even in a ‘higher-for-longer’ rate environment, there are markets with double-digit annualized price appreciation," said Fleming. “Starter-tier prices are increasing year over year by more than 10 percent in St. Louis, Miami and Pittsburgh."

April 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
Pittsburgh	+12.1 percent	+6.1 percent	+4.1 percent
Miami	+11.6 percent	+9.7 percent	+8.9 percent
St. Louis	+10.8 percent	+4.1 percent	+3.5 percent
New York	+9.9 percent	+7.4 percent	+1.1 percent
Warren, Mich.	+9.6 percent	+5.6 percent	+7.9 percent

Additional April 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.	+10.2 percent
Miami	+9.5 percent
San Diego	+8.0 percent
Warren, Mich.	+7.6 percent
Pittsburgh	+7.6 percent
There were no CBSAs with a Year-Over-Year Decrease in HPI

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

Next Release

The next release of the First American Data & Analytics House Price Index will take place the week of June 17, 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 prices 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 130 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. The company was named one of the 100 Best Workplaces for Innovators by Fast Company in 2023. 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/20240521637130/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 is the year-over-year increase in the National Home Price Index (HPI) for April 2024 as per the First American Data & Analytics report?

The year-over-year increase in the National Home Price Index (HPI) for April 2024 is 6.1%.

How much did national home prices rise from March to April 2024 according to First American Data & Analytics?

National home prices rose by 0.5% from March to April 2024.

How have higher mortgage rates affected home price appreciation according to First American's Chief Economist?

Higher mortgage rates have weakened affordability and reduced demand, leading to cooling home price appreciation.

Which metropolitan areas saw the highest year-over-year increases in starter home prices in April 2024?

St. Louis, Miami, and Pittsburgh saw the highest year-over-year increases in starter home prices in April 2024.

What was the increase in home prices for Anaheim, California, in April 2024 according to the First American HPI report?

Home prices in Anaheim, California, increased by 10.2% year-over-year in April 2024.