As mortgage rates rose and housing inventory increased, home price growth decelerated in the third quarter of 2022, according to the Fannie Mae Home Price Index (FNM-HPI) released Monday.
The FNM-HPI found that home price growth was at an annualized rate of 13.2% in Q3 2022, down from 19.1% in the previous quarter.
The FNM-HPI is a national, repeat-transaction home price index measuring the average quarterly price change for all single-family properties in the United States, excluding condos.
“Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said in a statement. “In addition to the greater affordability constraints for potential homebuyers, many existing homeowners likely feel ‘locked-in’ to their existing, lower interest-rate mortgages. This contributes to fewer homes being listed, as well as fewer potential buyers, and may lead to a growing share of listings having to cut prices to meet the reduced demand.”
“Furthermore, the supply of completed, new single-family homes for sale has begun to rise, suggesting that homebuilders may also need to begin offering greater price concessions to move inventory. We expect these trends to continue in the coming months,” Duncan said.
Quarter over quarter, home prices rose a seasonally adjusted 0.2% in Q3 2022. This is the slowest quarter of growth since Q4 2011.
On a non-seasonally adjusted basis, home prices were down 0.2% in the third quarter.
