Home Prices Hit New Peak as ‘Supplier’s Strike’ Continues

The Data & Analytics division of First American Financial Corporation has released its October 2023 Home Price Index (HPI) report, tracking home price changes less than four weeks behind real time at the national, state, and metropolitan (Core-Based Statistical Area) levels, including metropolitan price tiers that segment sale transactions into starter, mid, and luxury tiers.

“While the surge in long-term bond yields drove mortgage rates to 8%, sellers continued their ‘suppliers’ strike’ and continued to hold back housing supply. Preliminary October sale prices continue to indicate that the lack of supply is constraining the market more than sinking affordability, which reached another record low last month,” said Mark Fleming, Chief Economist at First American. “Nationally, when you can’t buy what’s not for sale, even if you can afford it with an 8% mortgage, it’s no surprise that house price appreciation continued for a seventh straight month.”

The First American Data & Analytics’ non-seasonally-adjusted (NSA) HPI showed that nationally in October 2023:

• Between September 2023 and October 2023 house prices increased 0.4%.
• House prices increased 7.0% between October 2022 and October 2023.
• House prices reached a new peak for the seventh month in a row in October 2023.
• House price growth reported in last month’s HPI for August 2023 to September 2023 was revised down 0.2%, from 0.7% to 0.5%.

October 2023 House Price State Highlights

The five most populous states that experienced year-over-year growth in the HPI are:

1. Pennsylvania (+8.1%)
2. Florida (+4.4%)
3. California (+4.0%)
4. Texas (+3.8%)
5. New York (+2.9%)

There only state with a year-over-year decrease in the HPI was South Dakota (-5.1%).

October 2023 House Price Local Market Highlights

Among the 30 Core-Based Statistical Areas (CBSAs) tracked by First American Data & Analytics, the five markets with the greatest year-over-year increase in the HPI are:

1. Miami (+17.2%)
2. Nassau County, N.Y. (+10.7%)
3. Anaheim, Calif. (+10.6%)
4. Warren, Mich. (+9.8%)
5. San Diego (+9.6%)

Among the 30 Core-Based Statistical Areas (CBSAs) tracked by First American Data & Analytics, there were two markets with a year-over-year decrease in the HPI: Austin, Texas (-3.9%) and San Antonio (-2.0%).

October 2023 Local Market Price Tier Highlights

The First American Data & Analytics HPI segments home price changes at the metropolitan level into three price tiers based on local market sales data: starter tier, which represents home sales prices at the bottom third of the market price distribution; mid-tier, which represents home sales prices in the middle third of the market price distribution; and the luxury tier, which represents home sales prices in the top third of the market price distribution.

“While resilient first-time homebuyer demand and ongoing supply shortages kept price growth in the starter tier of the market strong, the luxury end of the market surprised with unexpected surges in price appreciation," said Fleming. “Luxury-tier buyers typically already own homes and are trading up, despite taking on a mortgage rate on the home they purchase that is well above the rate on the home they sell. The robust luxury trade-up demand indicated by strong appreciation in markets like Anaheim, San Diego, Charlotte and Atlanta is a reminder that the lifestyle and non-financial reasons why people buy homes often supersedes the non-financial reasons why people buy homes."

To read the full report, including more data, charts, and methodology, click here.