The moment has arrived — the moment to take charge. This summer, at Inman Connect Las Vegas, July 30-Aug 1, 2024, experience the complete reinvention of the most important event in real estate. Join your peers and the industry’s best as we shape the future — together. Learn more.
U.S. home price growth posted another record high at the end of 2023, with December marking the seventh-consecutive month of rising prices, according to dueling data released Tuesday by the FHFA and S&P Global.
Home prices rose 5.5 percent on an annual basis in December, up from 5 percent in November. Prices fell 0.4 percent on a monthly basis, the biggest monthly decline tallied since January 2023, according to the S&P Case-Shiller Home Price Index.
“2023 U.S. housing gains haven’t followed such a synchronous pattern since the COVID housing boom,” Brian Luke, Head of Commodities Real and Digital Assets at S&P Dow Jones Indices, said in a statement. “The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the U.S. housing sector.”
TAKE THE FEBRUARY INMAN INTEL INDEX SURVEY NOW
The Federal Housing Finance Agency’s House Price Index, also released on Tuesday, found that home prices rose 6.5 percent between the fourth quarter of 2022 and the fourth quarter of 2023. The national median home price was $382,600 in December, according to the National Association of Realtors.
All 20 major U.S. housing markets tracked by Case-Shiller reported yearly gains for the first time in 2023, with San Diego tallying the highest annual increase at 8.8 percent, followed by Los Angeles and Detroit, each with an 8.3 percent uptick. By region, the Midwest and Northeast posted the strongest gains, with each recording a 6.7 percent annual increase.
Following 11 straight months of declines, Portland, Oregon, posted a one-year price gain of 0.3 percent, according to the index.
While 2023’s gains have been a far cry from the astronomical price growth of the pandemic housing market, 2023 was still an above-average year for price growth, especially considering the comparatively high price of mortgages.
“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years,” Luke said. “With trend growth at the national level of 4.7 percent, a 5.5 percent return demonstrates solid, steady growth. While we are not experiencing the double-digit gains seen in the previous two years, above-trend growth should be well received considering the rising costs of financing home mortgages.”
Economists pointed to evidence in the data that conditions in some major markets are already undergoing changes at the beginning of the year, such as the 0.8 percent and 0.9 percent month-over-month price declines recorded in San Diego and San Francisco, despite prices increasing there year over year. Bright MLS Chief Economist Lisa Sturtevant pointed out that both of those markets are experiencing growth in new listings.
“According to Bright MLS analysis of Altos Research data, these California metros are seeing some of the fastest growth in new listings, which could put downward pressure on prices,” she said.
