Houston-The Woodlands-Sugar Land Home Prices Up 3.9% Year Over Year in May, According to First American Data & Analytics Monthly Home Price Index Report

Rhea-AI Summary

First American Data & Analytics, a division of First American Financial (NYSE: FAF), released its May 2024 Home Price Index (HPI) report. The report reveals that home prices in Houston-The Woodlands-Sugar Land increased by 3.9% year-over-year in May 2024. Nationally, home prices rose by 5.9% year-over-year. The HPI segments the market into starter, mid, and luxury tiers, with Houston showing a 4.9% rise in the starter tier, a 3.7% increase in the mid-tier, and 4.0% in the luxury tier. Chief Economist Mark Fleming attributes this normalization to 'higher-for-longer' mortgage rates and increased housing supply, driven by life events such as diapers, diplomas, divorce, downsizing, and death. Notably, regions like Nassau County, St. Louis, Miami, and Pittsburgh showed significant year-over-year increases in the starter tier, reflecting the high demand among first-time homebuyers and those facing housing shortages.

Positive

• Houston-The Woodlands-Sugar Land HPI increased by 3.9% year-over-year in May 2024.
• National HPI increased by 5.9% year-over-year in May 2024.
• Starter tier in Houston-The Woodlands-Sugar Land saw a rise of 4.9%, indicating strong demand among first-time homebuyers.
• No Core-Based Statistical Areas (CBSAs) reported a year-over-year decrease in HPI.

Negative

• Houston-The Woodlands-Sugar Land HPI decreased by 0.1% month-over-month from April to May 2024.

Affordability Challenges and Influx of Homes for Sale Helping Normalize House Price Appreciation Levels

—'Five D’s’ Driving Homeowners to Sell Despite ‘Higher-for-Longer’ Mortgage Rates, 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 May 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.

May¹ 2024 Non-Seasonally Adjusted (NSA) HPI

Houston-The Woodlands-Sugar Land Market
Metric	Change in HPI
April-May 2024 (month over month)	-0.1 percent
May 2023-May 2024 (year over year)	+3.9 percent
National HPI
Metric	Change in HPI
April-May 2024 (month over month)	+0.5 percent
May 2023-May 2024 (year over year)	+5.9 percent

Chief Economist National HPI Analysis:

“In May, annualized house price appreciation slowed for the fifth consecutive month, clearly showing a returning-to-normal trend toward slower price appreciation. The normalization of house price appreciation is the result of ‘higher-for-longer’ mortgage rates reducing affordability and slowing demand, but it’s also driven by the increase in the number of homes for sale,” said Mark Fleming, chief economist at First American. “The longer we go with higher rates, the less the rate lock-in effect constrains sellers because moving decisions continue to happen regardless of mortgage rates due to the ‘Five D’s’ of life events – diapers, diplomas, divorce, downsizing and death.”

Year-Over-Year Price-Tier Data for the Houston-The Woodlands-Sugar Land Metro Area: May 2023 to May 2024

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.

CBSA	Starter	Mid-Tier	Luxury
Houston-The Woodlands-Sugar Land	4.9%	3.7%	4.0%

“The impact of lifestyle changes on housing demand is a significant reason why starter tier prices continue to outperform prices in the mid and luxury tiers," said Fleming. “Many millennials are still searching for their first home and now face competition from the oldest members of Generation Z. Housing was underbuilt for more than a decade, so it’s no surprise that starter tier prices are surging in the New York area, St. Louis, Miami and Pittsburgh."

May 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
Nassau County, N.Y.	+14.0 percent	+12.5 percent	+5.4 percent
St. Louis	+13.1 percent	+4.7 percent	+3.2 percent
Miami	+12.3 percent	+9.0 percent	+6.2 percent
Pittsburgh	+11.4 percent	+4.4 percent	+2.2 percent
New York	+10.1 percent	+6.8 percent	+2.1 percent

Additional May 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.	+10.5 percent
Miami	+9.5 percent
San Diego	+8.4 percent
Las Vegas	+7.0 percent
St. Louis	+6.7 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.

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 July 15, 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 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. 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/20240620580292/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 home price increase in Houston-The Woodlands-Sugar Land in May 2024?

The home prices in Houston-The Woodlands-Sugar Land increased by 3.9% year-over-year in May 2024.

How did the national home price index perform year-over-year in May 2024?

The national home price index increased by 5.9% year-over-year in May 2024.

What were the changes in Houston's home price tiers in May 2024?

In Houston, the starter tier increased by 4.9%, the mid-tier by 3.7%, and the luxury tier by 4.0% year-over-year in May 2024.

What factors contributed to the normalization of house price appreciation according to First American?

Higher mortgage rates and an increase in the number of homes for sale contributed to the normalization of house price appreciation.

Did any CBSAs report a year-over-year decrease in home prices?

No, there were no Core-Based Statistical Areas (CBSAs) that reported a year-over-year decrease in home prices.