Annual rise signals strength in housing market despite challenges
Single-family home price growth remained at a relatively slow pace in the fourth quarter of 2024, Fannie Mae reported in its latest Home Price Index (FNM-HPI).
Prices surged 7.1% year-over-year, outpacing the previous quarter’s revised growth rate of 5.1%, according to the Q4 FNM-HPI reading.
“In the current supply-constrained housing market, any changes to the fundamentals of affordability are going to affect demand, and we saw this in the fourth quarter with interest rates peaking near 8% and helping further slow home price growth,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.
Duncan noted the typical seasonal slowdown in housing activity during the fourth quarter. Seasonally adjusted single-family home price growth trended down to 1.7% in Q4 from 2.1% growth in Q3. On a non-seasonally adjusted basis, home prices rose by 0.4% quarter over quarter.
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“Of course, the fourth quarter is also typically the slowest of the year in terms of housing activity and purchase demand, so seasonality should be taken into account, as well,” Duncan explained. “For the year, housing demand held up surprisingly well, largely due to ongoing demographic support – Millennials continue to drive demand in many areas – and generally strong household finances.”
The index, which excludes condos, is a comprehensive measure of average quarterly price changes for single-family properties across the United States. It is calculated by pooling county-level data, resulting in both seasonally and non-seasonally adjusted national indices that reflect broader home price trends in the US.
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