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House Price Appreciation by State and Metro Area: Third Quarter 2024

Jing Fu2024-12-05T09:28:02-06:00

House prices posted modest annual growth for the third quarter of 2024, as elevated mortgage rates kept many potential home buyers away from the housing market. Nonetheless, housing inventory has improved in recent months. Nationally, house price appreciation has decelerated for two straight quarters. According to the quarterly all-transactions House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA), U.S. house prices rose 5.1% in the third quarter of 2024, compared to the third quarter of 2023. The quarterly FHFA HPI not only reports house prices at the national level, but also provides insights about house price fluctuations at the state and metro area levels. The FHFA HPI used in this article is the all-transactions index, measuring average price changes in repeat sales or refinancings on the same single-family properties. Between the third quarter of 2023 and the third quarter of 2024, all 50 states and the District of Columbia had positive house price appreciation, ranging from 1.2% to 8.8%. New Jersey and Connecticut topped the house price appreciation list with an 8.8% gain. They were followed by Rhode Island with an 8.4% gain. Meanwhile, the District of Columbia had the lowest price growth (+1.2%). Among all 50 states and the District of Columbia, 29 states exceeded the national growth rate of 5.1%. Compared to the second quarter of 2024, 40 out of the 50 states had a deceleration in house price appreciation in the third quarter. House prices have changed unevenly across U.S. metro areas, from the third quarter of 2023 to the third quarter of 2024. House price appreciation ranged from -9.0% to +19.1%. In the third quarter of 2024, 21 metro areas, in reddish color on the map above, had negative house price appreciation, while the remaining 363 metro areas experienced positive price appreciation. Additionally, house prices have increased dramatically since the COVID-19 pandemic. Nationally, house prices rose 50.4% between the first quarter of 2020 and the third quarter of 2024. More than half of the metro areas saw house prices rise by more than the national price growth rate of 50.4%. The table below shows the top and bottom ten markets for house price appreciation between the first quarter of 2020 and the third quarter of 2024. Among all the metro areas, house price appreciation ranged from 13.1% to 81.4%. Knoxville, TN has experienced the highest house price appreciation. Lake Charles, LA had the lowest appreciation. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

House Price Appreciation by State and Metro Area: Third Quarter 2024Jing Fu2024-12-05T09:28:02-06:00

Seventh Straight Month of Yearly Deceleration in Home Prices

Onnah Dereski2024-11-26T10:20:19-06:00

Home price growth continued to slow in September, growing at a rate just below 4% year-over-year. The S&P CoreLogic Case-Shiller Home Price Index (seasonally adjusted – SA) posted a 3.89% annual gain, down from a 4.28% increase in August. The S&P CoreLogic Case-Shiller HPI year-over-year rate has decelerated for the seventh consecutive month, peaking at 6.54% in February 2024. Meanwhile, the Federal Housing Finance Agency Home Price Index (SA) grew at a rate of 4.36%, stagnant from the previous month. By Metro Area In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across 20 metro areas. Compared to last year, all 20 metro areas reported a home price increase. There were 11 metro areas that grew more than the national rate of 3.89%. The highest annual rate was New York at 7.55%, followed by Cleveland at 7.13% and Chicago at 6.94%. The smallest home price growth over the year was seen by Denver at 0.22%, followed by Tampa at 0.99%, and Portland at 1.07%. By Census Division Monthly, the FHFA Home Price Index (SA) publishes not only national data but also data by census division. The highest year-over-year rate for September was 7.10% in the Middle Atlantic division, while the lowest was 1.16% in the West South Central division. Most divisions saw an increase from last month as shown in the chart below except for the West South Central and East North Central divisions. The FHFA Home Price Index releases their metro and state data on a quarterly basis, which NAHB analyzed in a previous post. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Seventh Straight Month of Yearly Deceleration in Home PricesOnnah Dereski2024-11-26T10:20:19-06:00

Existing Home Sales Rebound in October

Fan-Yu Kuo2024-11-21T11:15:05-06:00

Existing home sales in October rebounded from a 14-year low and posted the first annual increase in more than three years, as buyers took advantage when mortgage rates briefly reached a 2-year low in late September, according to the National Association of Realtors (NAR). While elevated home prices persist due to the lock-in effect, we expect sales activity to increase as mortgage rates moderate with additional Fed easing. Improving inventory should help slow home price growth and enhance affordability. Homeowners with lower mortgage rates have opted to stay put, avoiding trading existing mortgages for new ones with higher rates. This trend is driving home prices higher and holding back inventory. With the Federal Reserve beginning its easing cycle at the September meeting, mortgage rates are expected to gradually decrease, leading to increased demand and unlocking lock-in inventory in the coming quarters. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 3.4% to a seasonally adjusted annual rate of 3.96 million in October. On a year-over-year basis, sales were 2.9% higher than a year ago, ending a 38-month streak of year-over-year declines since July 2021. The first-time buyer share rose to 27% in October, up from 26% in September but down from 28% in October 2023. The existing home inventory level rose from 1.36 million in September to 1.37 million units in October and is up 19.1% from a year ago. At the current sales rate, September unsold inventory sits at a 4.2-months supply, down from 4.3-months last month but up 3.6-months a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 29 days in October, up from 28 days in September and 23 days in October 2023. The October all-cash sales share was 27% of transactions, down from 30% in September and 29% a year ago. All-cash buyers are less affected by changes in interest rates. The October median sales price of all existing homes was $407,200, up 4.0% from last year. This marked the 16th consecutive month of year-over-year increases. The median condominium/co-op price in October was up 1.6% from a year ago at $360,300. This rate of price growth will slow as inventory increases. Geographically, all four regions saw an increase in existing home sales in October, ranging from 1.3% in the West to 6.7% in the Midwest. On a year-over-year basis, sales rose 1.1%, 2.3%, and 8.5% in the Midwest, South and West. Sales in the Northeast stayed unchanged. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 70.6 to 75.8 in September due to improved inventory and lower mortgage rates in late summer. On a year-over-year basis, pending sales were 2.6% higher than a year ago per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Rebound in OctoberFan-Yu Kuo2024-11-21T11:15:05-06:00

Home Price Growth Continued to Slow in August

Onnah Dereski2024-10-31T13:19:55-05:00

Home price growth continued to slow in August, growing at a rate just above 4% year-over-year. The S&P CoreLogic Case-Shiller Home Price Index (seasonally adjusted – SA) posted a 4.24% annual gain, down from a 4.82% increase in July. Similarly, the Federal Housing Finance Agency Home Price Index (SA) rose 4.25%, down from 4.72% in July. Both indexes experienced a sixth consecutive year-over-year deceleration in August. The year-over-year rate peaked in February 2024 when the S&P CoreLogic Case-Shiller stood at 6.57% and the FHFA at 7.28%. By Metro Area In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across major metro areas. Compared to last year, all 20 metro areas reported a home price increase. There were 12 metro areas that grew more than the national rate of 4.24%. The highest annual rate was New York at 8.07%, followed by Las Vegas and Chicago both with rates of 7.22%. The smallest home price growth over the year was seen by Denver at 0.68%, followed by Portland at 0.82%, and Dallas at 1.57%. By Census Division Monthly, the FHFA Home Price Index (SA) publishes not only national data but also data by census division. All divisions saw an annual increase of over 2% in August. The highest rate for August was 6.31% in the East South Central1 division, while the lowest was 2.36% in the West South Central division. As shown in graph below, all divisions saw a slow in rates compared to June. The FHFA Home Price Index releases their metro and state data on a quarterly basis, which NAHB analyzed in a previous post. See Census Divisions by state here: us_regdiv.pdf Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Home Price Growth Continued to Slow in AugustOnnah Dereski2024-10-31T13:19:55-05:00

All-Cash Sales and Prices Decline in the Third Quarter

Fan-Yu Kuo2024-10-25T11:18:15-05:00

All-cash purchases accounted for 7.9% of new home sales in the third quarter of 2024, marking the highest level this year but lowest level for the third quarter since 2022, according to NAHB analysis of the latest Census Quarterly Sales by Price and Financing report. Among mortgaged home sales, FHA-backed and VA-backed sales fell while conventional sales increased. This is in line with the overall trend observed in mortgage activity, as mortgage demand grew with moderating rates during this period. Despite the decline in total sales, the median purchase price of new homes (across all financing types) continued to increase in the third quarter. Since the Federal Reserve began raising interest rates in early 2022, the share of all-cash new home sales has increased significantly, with an average of 8.7% amid this tightening cycle. The interest rate hikes have caused the average mortgage rate to more than double, surging from 3.1% in the fourth quarter of 2021 to 7.0% by the end of second quarter of 2024. The chart below illustrates how much more sensitive the all-cash share has become to changes in the federal funds rate since 2017. However, after peaking at 10.7% in the fourth quarter of 2022, the all-cash share has recently trended lower. Although cash sales make up a relatively small portion of new home sales, they constitute a larger share of existing home sales. This share also increased significantly since the Fed began raising interest rates in early 2022. According to estimates from the National Association of Realtors, 30% of existing home transactions were all-cash sales in September 2024, up from 26% in August and 29% a year ago. The share of FHA-backed sales fell from 13.0% to 11.9% in the third quarter of 2024, reaching the lowest level since the fourth quarter of 2022. This share remains below the post-Great Recession average of 17.0%. Meanwhile, the share of VA-backed sales also decreased, falling from 5.4% to 5.1%. Among declines in other types of new home financing, the share of conventional loans financed sales saw an increase in the third quarter of 2024, climbing from 73.9% to 75.1%, the highest level since the fourth quarter of 2022. Price by Type of Financing Different sources of financing also serve distinct market segments, which is revealed in part by the median new home price associated with each. In the third quarter, the national median sales price of a new home was $420,400. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans, and cash were $466,100, $352,100, $404,000, and $401,600, respectively. The purchase price of new homes financed with conventional and cash declined over the past year, while the price of homes financed with FHA loans and VA loans increased. The largest decline occurred in cash sales prices, which fell 21.1% over the year. This is in stark contrast to year-over-year price changes in the third quarter of 2022 and 2023, when median sales price rose 16.9% and 18.2% (see below). Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

All-Cash Sales and Prices Decline in the Third QuarterFan-Yu Kuo2024-10-25T11:18:15-05:00

New Home Sales Improve in September

Jing Fu2024-10-24T11:16:51-05:00

Home buyers moved off the sidelines in September following the Federal Reserve’s recent move to cut interest rates for the first time in four years. Sales of newly built, single-family homes in September increased 4.1% to a 738,000 seasonally adjusted annual rate from a downwardly revised August number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in September is up 6.3% compared to a year earlier. Despite challenging affordability conditions, home builder confidence edged higher in October as they anticipate that mortgage rates will gradually, in an uneven manner, moderate in the coming months. There is a significant need for additional housing supply, as many prospective home buyers are entering the market. Following the Fed’s actions in September, mortgage rates fell to 6.18%, from 6.5% in August. However, new home sales will likely weaken in October due to a recent rise in long-term rates. A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the September reading of 738,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory in September remained elevated at a level of 470,000, up 8.0% compared to a year earlier. This represents a 7.6 months’ supply at the current building pace. Completed for-sale new homes rose to 108,000, the highest level since 2009. The median new home sale price in September was $426,300, essentially unchanged from a year ago. The Census data reveals a gain for new home sales priced below $300,000, which made up 17% of new home sales in September, compared to 14% a year ago. Regionally, on a year-to-date basis, new home sales are up 19.2% in the Midwest, 1.1% in the South and 3.4% in the West. New home sales are down 1.1% in the Northeast. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

New Home Sales Improve in SeptemberJing Fu2024-10-24T11:16:51-05:00

Existing Home Sales Fall to 14-Year Low in September

Fan-Yu Kuo2024-10-23T11:22:12-05:00

Despite recent easing mortgage rates and improved inventory, existing home sales fell to a 14-year low in September as elevated home prices are causing potential buyers to hold out for lower rates, according to the National Association of Realtors (NAR). Sales remained sluggish as the lock-in effect kept home prices elevated. However, we expect increased activity in the coming months as mortgage rates moderate with additional Fed easing. Improving inventory should help slow home price growth and enhance affordability. Homeowners with lower mortgage rates have opted to stay put, avoiding trading existing mortgages for new ones with higher rates. This trend is driving home prices higher and holding back inventory. With the Federal Reserve beginning its easing cycle at the September meeting, mortgage rates are expected to gradually decrease, leading to increased demand and unlocking lock-in inventory in the coming quarters. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 1.0% to a seasonally adjusted annual rate of 3.84 million in September, the lowest level since October 2010. On a year-over-year basis, sales were 3.5% lower than a year ago. The first-time buyer share remained at 26% in September, matching the lowest level since November 2021 and August 2024, but down from 27% in September 2023. The existing home inventory level rose from 1.37 million in August to 1.39 million units in September and is up 23.0% from a year ago. At the current sales rate, September unsold inventory sits at a 4.3-months supply, up from 4.2-months last month and 3.4-months a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. However, the count of single-family resale homes available for sale is up almost 22.2% on a year-over-year basis. Homes stayed on the market for an average of 28 days in September, up from 26 days in August and 21 days in September 2023. The September all-cash sales share was 30% of transactions, up from 26% in August and 29% a year ago. All-cash buyers are less affected by changes in interest rates. The September median sales price of all existing homes was $404,500, up 3.0% from last year. This marked the 15th consecutive month of year-over-year increases and the highest level for the month of September. The median condominium/co-op price in September was up 2.2% from a year ago at $361,600. This rate of price growth will slow as inventory increases. Existing home sales in September were mixed across the four major regions. In the Northeast, Midwest, and South, sales fell by 4.2%, 2.2%, and 1.7%, respectively, while sales in the Midwest rose by 4.1%. On a year-over-year basis, sales decreased in the Northeast (-6.1%), Midwest (-5.3%) and South (-5.5%). Sales in the West increased 5.6% from a year ago. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 70.2 to 70.6 in August due to lower mortgage rates. On a year-over-year basis, pending sales were 3.0% lower than a year ago per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Fall to 14-Year Low in SeptemberFan-Yu Kuo2024-10-23T11:22:12-05:00

Home Price Growth Slowing

Onnah Dereski2024-09-24T16:22:45-05:00

Home prices remain elevated but price growth continues to decelerate, according to the S&P CoreLogic Case-Shiller Home Price Index (HPI) recent release. The S&P CoreLogic Case-Shiller HPI (seasonally adjusted) reached its 14th monthly consecutive record high in July 2024. The index increased at a seasonally adjusted annual rate of 2.15%, down slightly from a revised June rate of 2.19%. This rate has slowed over the past six months, from a high of 6.53% in February 2024. The index has not seen an outright decrease since January of 2023 (nineteen months). Separately, the House Price Index released by the Federal Housing Finance Agency (FHFA; SA) posted its sixth monthly consecutive record high, after having decreased slightly in January of this year. The FHFA HPI recorded a 1.57% increase in July, upward from a revised 0.03% rate in June. Year-Over-Year Home prices experienced a fifth consecutive year-over-year declaration in July, tabulated by both indexes. The S&P CoreLogic Case-Shiller HPI (not seasonally adjusted – NSA) posted a 4.96% annual gain in July, down from a revised 5.50% increase in June. Meanwhile, the FHFA HPI (NSA) index rose 4.56%, down from a revised 5.37% in June. Both indexes have seen yearly growth rates slow since February 2024, when the S&P CoreLogic Case-Shiller stood at 6.54% and the FHFA at 7.23%. By Metro Area In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across 20 metro areas. At an annual rate, only one out of 20 metro areas reported a home price decline: San Francisco at -3.10%. Among the 20 metro areas, 15 exceeded the national rate of 2.15%. Seattle had the highest rate at 13.78%, followed by New York at 6.11%, and Las Vegas at 5.76%. The monthly trends are shown in the graph below. Monthly, the FHFA HPI (SA) releases not only national but also census division house price indexes. Out of the nine census divisions, three posted negative monthly depreciation (adjusted to an annual rate) for July: South Atlantic at -7.88%, West South Central at -6.80%, and East South Central at -0.66%. The divisions with positive home price appreciation ranged from 2.02% in West North Central to 11.57% in East South Central. The FHFA HPI releases its metro and state data on a quarterly basis, which NAHB analyzed in a previous post. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Home Price Growth Slowing Onnah Dereski2024-09-24T16:22:45-05:00

Consumer Confidence Dips Amid Job Market Concerns

Fan-Yu Kuo2024-09-24T13:21:33-05:00

Consumer confidence fell to a 3-month low in September due to growing concerns about the job market, despite the labor market remaining healthy. Recent job growth revisions showed fewer jobs were added in 2023 than initially reported. However, the unemployment rate remained at a relatively low level and wage growth continued to outpace inflation. This suggests the labor market is cooling from its red-hot pace but remains steady. The Consumer Confidence Index, reported by the Conference Board, is a survey measuring how optimistic or pessimistic consumers feel about their financial situation. This index fell from 105.6 to 98.7 in September, the largest monthly decline since August 2021. The Consumer Confidence Index consists of two components: how consumers feel about their present situation and about their expected situation. The Present Situation Index decreased 10.3 points from 134.6 to 124.3, and the Expectation Situation Index fell 4.6 points from 86.3 to 81.7, but still remained above the 80 threshold. Historically, an Expectation Index reading below 80 often signals a recession within a year. Consumers’ assessment of current business conditions turned negative in September. The share of respondents rating business conditions “good” decreased by 2.3 percentage points to 18.8%, while those claiming business conditions as “bad” rose by 2.9 percentage points to 20.2%. Consumers’ assessments of the labor market worsened as well. The share of respondents reporting that jobs were “plentiful” decreased by 1.8 percentage points to 30.9%, while those who saw jobs as “hard to get” increased by 1.5 percentage points to 18.3%. Consumers were also less optimistic about the short-term outlook. The share of respondents expecting business conditions to improve fell from 19.1% to 18.5%, while those expecting business conditions to deteriorate rose from 14.5% to 16.6%. Similarly, expectations of employment over the next six months were less positive. The share of respondents expecting “more jobs” increased by 0.1 percentage points to 16.4%, and those anticipating “fewer jobs” climbed by 1.3 percentage points to 18.3%. The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home rose to 5.7% in September. Of those, respondents planning to buy a newly constructed home increased slightly to 0.7%, while those planning to buy an existing home decreased to 2.4%. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Consumer Confidence Dips Amid Job Market ConcernsFan-Yu Kuo2024-09-24T13:21:33-05:00

Existing Home Sales Slide Despite Lower Mortgage Rates

Fan-Yu Kuo2024-09-19T13:15:15-05:00

Existing home sales fell to a 10-month low in August despite easing mortgage rates and improved inventory, according to the National Association of Realtors (NAR). Home sales remained sluggish as the lock-in effect kept home prices elevated. Meanwhile, the share of first-time buyer in August dropped to a record low. However, we expect increased activity in the coming months as mortgage rates continue to moderate. Improving inventory is likely to ease home price growth and enhance affordability. Homeowners with lower mortgage rates have opted to stay put, avoiding trading existing mortgages for new ones with higher rates. This trend is driving home prices higher and holding back inventory. With the Federal Reserve beginning its easing cycle at the September meeting, mortgage rates are expected to gradually decrease, leading to increased demand and unlocking lock-in inventory in the coming quarters. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 2.5% to a seasonally adjusted annual rate of 3.86 million in August, the lowest level since October 2023. On a year-over-year basis, sales were 4.2% lower than a year ago. The first-time buyer share dropped to 26% in August, the lowest level since November 2021, down from 29% in both July and August 2023. The existing home inventory level rose from 1.34 million in July to 1.35 million units in August and is up 22.7% from a year ago. At the current sales rate, August unsold inventory sits at a 4.2-months supply, up from 4.1-months last month and 3.3-months a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. However, the count of single-family resale homes available for sale is up almost 21.4% on a year-over-year basis. Homes stayed on the market for an average of 26 days in August, up from 24 days in July and 20 days in August 2023. The August all-cash sales share was 26% of transactions, down from 27% in both July and a year ago. All-cash buyers are less affected by changes in interest rates. The August median sales price of all existing homes was $416,700, up 3.1% from last year. This marked the 14th consecutive month of year-over-year increases. The median condominium/co-op price in August was up 3.5% from a year ago at $366,500. This rate of price growth will slow as inventory increases. Existing home sales in August were mixed across the four major regions. In the Northeast, South, and West, sales fell by 2.0%, 3.9%, and 2.7%, respectively, while sales in the Midwest remained unchanged. On a year-over-year basis, sales decreased in the Midwest (-5.2%), South (-6.0%) and West (-1.4%). Sales in the Northeast were unchanged from a year ago. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 74.3 to 70.2 in July due to persistent affordability challenges. On a year-over-year basis, pending sales were 8.5% lower than a year ago per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Slide Despite Lower Mortgage RatesFan-Yu Kuo2024-09-19T13:15:15-05:00

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