Home Prices Advance Another 3 Percent in Second Quarter, Show Signs of Slowing
Fannie Mae's latest Home Price Index (FNM-HPI) reveals a 6.9% increase in single-family home prices from Q2 2023 to Q2 2024, down from the previous quarter's 7.3% growth. Quarterly, prices rose a seasonally adjusted 1.3% in Q2 2024, lower than Q1's 2.0% growth. Non-seasonally adjusted prices increased by 3.0% in Q2 2024.
Chief Economist Doug Duncan notes that while prices continue to rise, growth is slowing due to elevated mortgage rates, affordability constraints, and increasing housing supply in many metro areas. The FNM-HPI, a national repeat-transaction index, excludes condos and is available publicly as a quarterly series from Q1 1975 to Q2 2024.
- Home prices increased 6.9% year-over-year in Q2 2024
- Quarterly home prices rose 1.3% (seasonally adjusted) in Q2 2024
- Non-seasonally adjusted home prices increased by 3.0% in Q2 2024
- Home price growth rate decreased from 7.3% in Q1 to 6.9% in Q2 2024
- Quarterly price growth slowed from 2.0% in Q1 to 1.3% in Q2 2024
- Elevated mortgage rates and affordability constraints are limiting homebuyer demand
- Tight inventory and affordability issues may constrain mortgage demand and home sales
Latest FNM-HPI Reading Showed Year-over-Year Increase of 6.9 Percent in Q2 2024
"Home prices rose again in the second quarter, but the pace of growth slowed as important elements of housing demand and supply inched closer together," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Elevated mortgage rates and ongoing affordability constraints are increasingly limiting homebuyer demand and thus dampening the pace of home price appreciation. Meanwhile, the number of homes available for sale is rising in many metro areas, which is also dampening home price growth. While we expect home price growth to decelerate further in the coming quarters, a still-tight inventory of homes for sale and stretched affordability remain significant challenges and, in our view, are likely to constrain mortgage demand and home sales for the foreseeable future."
The FNM-HPI is produced by aggregating county-level data to create both seasonally adjusted and non-seasonally adjusted national indices that are representative of the whole country and designed to serve as indicators of general single-family home price trends. The FNM-HPI is publicly available at the national level as a quarterly series with a start date of Q1 1975 and extending to the most recent quarter, Q2 2024. Fannie Mae publishes the FNM-HPI approximately mid-month during the first month of each new quarter.
For more information on the FNM-HPI, including a description of the methodology and the Q2 2024 data file, please visit our Research & Insights page on fanniemae.com.
To receive e-mail updates regarding future FNM-HPI updates and other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.
Fannie Mae's home price estimates are based on preliminary data available as of the date of index estimation and are subject to change as additional data become available. Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.
About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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FAQ
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