Key Takeaways:
– Home prices increased by 0.7 percent between August and September 2023.
– Home prices were up 6.7 percent annually between September 2022 and September 2023.
– The “lock-in effect” has kept homeowners from listing their homes, leading to a drop in housing supply.
– The average sale price reached $448,650 in September, a new peak.
– Starter homes saw the largest price increases in September, indicating strong demand from first-time homebuyers.
– Pennsylvania experienced the highest year-over-year growth in housing prices, followed by New York, Florida, Texas, and California.
– Miami had the highest year-over-year increase in housing prices among metropolitan areas, followed by St. Louis, Anaheim, San Diego, and Baltimore.
inman:
Home prices increased 0.7 percent between August and September of 2023, and were up 6.7 percent annually, according to a new report.
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Housing prices reached a new peak in September, according to a new report.
The report, released Monday by First American Data and Analytics, found that home prices increased 0.7 percent between August and September of 2023, and were up 6.7 percent between September of 2022 and September 2023.
The sustained increase in prices has come as the “lock-in effect” has kept homeowners from listing their homes and losing their lower mortgage rates, leading to a steep dropoff in housing supply.
“Rising mortgage rates continue to depress housing supply and suppress affordability, chilling the housing market. Preliminary September house price data suggests that the lack of supply is constraining the market more than reduced demand due to record-low affordability,” Mark Fleming, chief economist at First American, said in a statement. “Nationally, house prices continue to set new records as potential sellers sit on the sidelines, limiting supply, while buyers chase what few homes are available for sale.”
September was the sixth straight month home prices hit a new peak, according to First American’s data, with the average sale price hitting $448,650.
The report divides home price changes into three distinct categories: starter tier, mid-tier and luxury tier, with the starter tier seeing the largest jumps in price during September, suggesting that the strongest demand that exists right now is from aspiring first-time homebuyers.
“The fact that the starter home price tier continues to outperform the middle and luxury price tiers in many markets suggests that first-time home buyer demand remains resilient despite significantly lower affordability,” Fleming said. “As of 2022, more than half of all millennial households were homeowners, but many more are aging into their 30s, the prime homebuying age, and seeking to buy instead of rent. While less affordable than a year ago, the pace of starter tier price growth in markets like Miami, Pittsburgh and St. Louis suggests homeownership demand among millennials is far from dead.”
Pennsylvania experienced the highest year-over-year growth on First American’s Housing Price Index, increasing 7.8 percent. New York saw prices grow by 4.4 percent, Florida by 3.5 percent, Texas by 3.5 percent and California by 3.2 percent.
Miami was the metropolitan area with the highest year-over-year increase at 8.8 percent. It was followed by St. Louis at 8.2 percent, Anaheim at 7.4 percent, San Diego at 7.1 percent and Baltimore at 7 percent.
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Property Chomp's Take:
Home prices continue to rise, with a 0.7 percent increase between August and September of 2023, and a 6.7 percent increase annually, according to a new report. This sustained increase in prices can be attributed to the "lock-in effect," which has kept homeowners from listing their homes and losing their lower mortgage rates, resulting in a decline in housing supply.
The rise in mortgage rates has impacted housing supply and affordability, leading to a chilling effect on the housing market. Mark Fleming, chief economist at First American, stated that the lack of supply is constraining the market more than reduced demand due to record-low affordability. As a result, house prices continue to set new records nationally, as potential sellers hold off on listing their homes, limiting supply while buyers compete for the few homes available for sale.
September marked the sixth consecutive month that home prices reached a new peak, with the average sale price reaching $448,650. The report divides home price changes into three categories: starter tier, mid-tier, and luxury tier. Interestingly, the starter home price tier has seen the largest increase in price, suggesting strong demand from aspiring first-time homebuyers.
Despite the decrease in affordability, the pace of starter tier price growth in cities like Miami, Pittsburgh, and St. Louis indicates that homeownership demand among millennials is far from dead. As more millennials age into their 30s, the prime homebuying age, they are increasingly looking to buy instead of rent.
On a regional level, Pennsylvania experienced the highest year-over-year growth in housing prices, with a 7.8 percent increase. New York, Florida, Texas, and California also saw significant price growth. In terms of metropolitan areas, Miami had the highest year-over-year increase at 8.8 percent, followed by St. Louis, Anaheim, San Diego, and Baltimore.
The report highlights the ongoing trend of rising home prices and the challenges it presents for potential buyers. It is crucial for individuals to stay informed and prepared in the ever-changing real estate market. Events like Virtual Inman Connect on Nov. 1-2, 2023, and Inman Connect New York on Jan. 23-25, 2024, provide valuable insights and tools to navigate the future of real estate.
