Fannie Mae predicts further deceleration as inventory challenges persist
The pace of single-family home price appreciation continued to slow in the second quarter of 2024, according to Fannie Mae's latest Home Price Index (FNM-HPI).
The index, which measures the average quarterly price change for single-family properties in the United States excluding condos, showed a 6.9% year-over-year increase in the second quarter. This marks a decline from the previous quarter's upwardly revised annual growth rate of 7.3%.
On a quarterly basis, home prices rose by a seasonally adjusted 1.3% in Q2, down from the revised 2% growth seen in Q1. The non-seasonally adjusted increase was 3% in the same period.
"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," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in the report. "Elevated mortgage rates and ongoing affordability constraints are increasingly limiting homebuyer demand and thus dampening the pace of home price appreciation.”
Duncan also noted the impact of increasing housing inventory on price growth.
“Meanwhile, the number of homes available for sale is rising in many metro areas, which is also dampening home price growth,” he said. “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."
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The FNM-HPI aggregates county-level data to create both seasonally adjusted and non-seasonally adjusted national indices that represent single-family home price trends across the country. The index is available as a quarterly series starting from Q1 1975 and extends to the most recent quarter, Q2 2024.
Fannie Mae releases the FNM-HPI mid-month during the first month of each new quarter, providing a detailed look at national home price trends.
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