While the annual rate of increase in home prices slowed dramatically as a result of inflated interest rates, single-family home prices increased at a non-seasonally adjusted annual rate of 4.7% from Q1 2022 to Q1 2023, down from the previous quarter's revised annual growth rate of 8.6%, according to Fannie Mae's latest Home Price Index (FNM-HPI) reading, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States — excluding condos.
On a quarterly basis, home prices rose a seasonally adjusted 1% in Q1 2023, above the 0.0% growth seen in the prior quarter. On a non-seasonally adjusted basis, home prices also increased by 1% in Q1 2023.
"As expected, the annual rate of increase in home prices has slowed dramatically in response to the rapid and significant increase in interest rates," said Doug Duncan, Fannie Mae Senior VP and Chief Economist. "Still, the fact that prices rose slightly in the first quarter is evidence of significant pent-up mortgage 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 low mortgage rates from listing their homes."
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