U.S. Home Prices Rise Nearly 20%

According to the Federal Housing Finance Agency House Price Index (FHFA), U.S. home prices rose 17.5% from Q4 of 2020 to Q4 of 2021. House prices were up 3.3% compared to Q3 of 2021. FHFA's seasonally adjusted monthly index for December was up 1.2% from November.

"House prices continued to climb but not as rapidly during the final quarter of 2021 as in earlier quarters," said William Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. "Housing trends over the past year have created challenges. The quick house price gains may be counterbalanced as mortgage rates increase. However, more expensive housing has elevated affordability to become a broader concern as available supply remains limited."

According to the Mortgage Bankers Association, mortgage applications dropped 5.4% week-over-week, for the week ending February 11, 2022. Earlier findings showed the refinance share of overall mortgage activity decreased to 52.8% of total applications from 56.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5% of total applications.

As rates rise and applications dip, buyers are still sifting through the limited supply of homes available during the four weeks ending February 6, active listings—defined as the number of homes listed for sale at any point during the period—fell 29% year-over-year, dropping to an all-time low of 440,000. Listings were down 50% from the same period in 2020.

Housing markets have continued to experience positive annual appreciation since the start of 2012, while home prices rose in all 50 states and the District of Columbia between Q4 of 2020 and 2021.

The five areas with the highest annual appreciation were:

1) Arizona (27.4%)

2) Utah (27.1%)

3) Idaho (27.0)

4) Florida (25.6%)

5) Tennessee (24.1%)

The areas showing the lowest annual appreciation were:

1) District of Columbia (6.6%)

2) Louisiana (10.2%)

3) North Dakota (10.3%)

4) Maryland (10.8%)

5) Alaska (11.3%)

House prices rose in all of the top 100 largest metro areas over the last four quarters. Annual price increases were greatest in Cape Coral-Fort Myers, Florida, where prices increased by 34.6%. Prices were weakest in Frederick-Gaithersburg-Rockville, Maryland, where they increased by only 8.5%. Trends in the Top 100 Metropolitan Statistical Areas can be found here.

Of the nine census divisions, the Mountain division recorded the strongest four-quarter appreciation, posting a 23.1% gain between the four quarters of 2020 and 2021, and a 3.5% increase in Q4 of 2021. Annual home price appreciation was weakest in the West North Central division, where prices rose by 13.6%.

To read the full report, click here.