US Home Prices Increase Quarterly and Annually in Q1

According to Fannie Mae’s latest Home Price Index (FNM-HPI), single-family home prices increased at a non-seasonally adjusted annual rate of 4.7% from 2022Q1 to 2023Q1, down from the previous quarter’s revised annual growth rate of 8.6%.

On a quarterly basis, home prices rose a seasonally adjusted 1.0% in Q1, above the no-change seen in the prior quarter. On a non-seasonally adjusted basis, home prices also increased by 1.0%.

Adding additional background to the FNM-HPI as well as his analysis, Fannie Mae’s Senior Vice President and Chief Economist Dr. Doug Duncan said:

“As expected, the annual rate of increase in home prices has slowed dramatically in response to the rapid and significant increase in interest rates. Still, the fact that prices rose slightly in the first quarter is evidence of significant pent-up demand, despite ongoing affordability constraints. Even though mortgage rates remain elevated compared to the previous few years, the acute lack of housing supply remains supportive of home prices. Of course, the shortage of homes for sale is currently being exacerbated by the so-called ‘lock-in effect,’ which continues to disincentivize huge numbers of households with lower mortgage rates from listing their homes.”