Year-over-year home price growth decelerated in the third quarter.

As Fannie Mae predicted in the second quarter of 2022, home price growth decelerated sharply during the third quarter, which fell in-line with a sharp rise in mortgage rates, further proving that the current rate and home price environment is weighing on affordability. On a non-seasonally adjusted annual basis, single-family home prices increased at a rate of 13.8% during the third quarter, down from Fannie Mae’s prior prediction of 19.1% according to their latest Home Price Index (FNM-HPI) which measures the average, quarterly price change for all single-family properties in the country, excluding condos and multi-family properties. The deceleration is more noticeable on a quarterly basis, as home prices rose a seasonally adjusted 0.2% during the third quarter, which is now the slowest quarter of growth since the fourth quarter of 2011. On a non-seasonally adjusted basis, home prices declined by 0.2% during the third quarter. “Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates—and declining housing affordability—appears to have weighed further on demand,” said Doug Duncan, Fannie Mae’s SVP and Chief Economist. “In addition to the greater affordability constraints for potential homebuyers, many existing homeowners likely feel ‘locked-in’ to their existing, lower interest-rate mortgages.” 

Source: MReport