Home Prices Grew at Near-Record High in Second Quarter

Rhea-AI Summary

Fannie Mae reports that single-family home prices increased at an annualized rate of 19.4% in Q2 2022, a slight decrease from 20.5% in the previous quarter. Quarterly, home prices rose by 4.3%. Demand for homes remains strong due to low inventory and preemptive buying to avoid anticipated mortgage rate hikes. However, rising mortgage rates are expected to cool demand and moderate future home price appreciation.

Positive

• Home prices increased at an annualized rate of 19.4% in Q2 2022.
• Quarterly home price growth was 4.3%, indicating sustained price appreciation.

Negative

• Anticipated cooling in purchase demand due to rising mortgage rates.
• Potential moderation in home price appreciation in subsequent quarters.

FNM-HPI Measured Home Price Growth at Annualized Rate of 19.4 Percent in Q2 2022

WASHINGTON, July 14, 2022 /PRNewswire/ -- Single-family home prices increased at the annualized rate of 19.4 percent in Q2 2022, down slightly from the previous quarter's upwardly revised 20.5 percent, according to Fannie Mae's (OTCQB: FNMA) latest Home Price Index (FNM-HPI) reading, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. On a quarterly basis, home prices rose a seasonally adjusted 4.3 percent in Q2 2022.

"Home prices maintained a near-historic pace of appreciation in the second quarter, as low levels of housing inventory continued to support price growth," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "At the end of 2021 and extending into 2022, we believe many homebuyers pulled forward their purchase plans to avoid expected increases in mortgage rates, contributing to demand for homes and strong price appreciation. Given the sharp rise in mortgage rates since that time, and the resulting negative impact on affordability to potential homebuyers, we expect purchase demand to cool in the quarters ahead, and for home price appreciation to moderate as a result."

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 2022. 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 2022 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, 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, 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, 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 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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SOURCE Fannie Mae

FAQ

What was the annualized home price growth rate reported by FNMA in Q2 2022?

Fannie Mae reported an annualized home price growth rate of 19.4% in Q2 2022.

How much did home prices rise quarterly according to FNMA's Q2 2022 report?

Home prices rose by 4.3% on a quarterly basis in Q2 2022.

What factors are affecting home price appreciation according to Fannie Mae's report?

Low housing inventory and rising mortgage rates are key factors affecting home price appreciation.

Is Fannie Mae expecting a slowdown in home buying?

Yes, Fannie Mae expects purchase demand to cool due to rising mortgage rates.

What impact might rising mortgage rates have on FNMA's future home price projections?

Rising mortgage rates may lead to a moderation in future home price appreciation.