Find out by how much and whether they've hit their peak
The latest Home Price Index (HPI) from First American has indicated a continuing rise in national house prices, with January marking the 10th consecutive month of reaching new peaks.
The report revealed a 0.3% increase in house prices from December 2023 to January 2024, as well as a 7.2% rise year-over-year. However, the annual house price growth rate saw a slight decline from its 7.7% peak in December.
According to Mark Fleming, chief economist at First American, the December peak was driven by buyers capitalizing on decreased mortgage rates. The rate of appreciation is likely to slow down in the coming months, as indicated by January figures cooling modestly by half a percent.
Fleming also noted that optimism for declining mortgage rates in 2024 could encourage more homeowners to sell, potentially increasing supply and enhancing affordability for buyers.
Despite this potential increase in supply, he said affordability isn’t likely to increase dramatically, describing 2024 as “the year that house price appreciation doesn’t get too cold, but closer to just right.”
Home price trends in state and local markets
First American’s state-level analysis found that that the five most populous states experienced varied year-over-year growth rates, with Pennsylvania leading at an 8.4% increase in the HPI, followed by Florida, Texas, California, and New York, all showing positive growth without any states reporting a decline in the HPI.
Local market analysis further underscored the diversity in housing market performance across the country. While all 30 Core-Based Statistical Areas (CBSAs) tracked showed year-over-year price increases, 23 of these markets were priced below their post-pandemic peaks, with notable declines in Oakland (-13.5%), Austin (-9.9%), and Seattle (-9.2%).
The report also categorized home price changes at the metropolitan level into three price tiers—starter, mid, and luxury.
The starter home market in Nassau County, N.Y., led with a 17.8% year-over-year increase. Meanwhile, Pittsburgh led with a 12.1% increase within the mid-tier market. As for luxury homes, the biggest increase was seen in Miami, where prices went up 12%.
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