First American Data & Analytics, a leading national provider of property-centric information, risk management and valuation solutions and a division of First American Financial Corp., released its September 2023 Home Price Index (HPI) report.
The report tracks home price changes at the national, state and metropolitan (Core-Based Statistical Area) levels and includes metropolitan price tiers that segment sale transactions into starter, mid and luxury tiers.
September 2023 House Price Index highlights:
- Between August 2023 and September 2023 house prices increased 0.7 percent.
- House prices increased 6.3 percent between September 2022 and September 2023.
- House prices reached a new peak for the sixth month in a row in September 2023.
- House price growth reported in last month’s HPI for July 2023 to August 2023 was revised down 0.2 percent, from 0.7 percent to 0.5 percent.
“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 release. “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 2023 house price state highlights:
- The five most populous states experienced the following year-over-year growth in the HPI: Pennsylvania (+7.8 percent), New York (+4.4 percent), Florida (+3.5 percent), Texas (+3.5 percent), and California (+3.2 percent).
- There were two states with a year-over-year decrease in the HPI: South Dakota (-11.2 percent) and Nevada (-0.7 percent).
September 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: Miami (+8.8 percent), St. Louis (+8.2 percent), Anaheim, Calif. (+7.4 percent), San Diego (+7.1 percent), and Baltimore (+7.0 percent).
- 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 (-3.8 percent) and Las Vegas (-0.9 percent).
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.
"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," said Fleming. “As of 2022, more than half of all millennial households were homeowners, but many more are aging into their 30s, the prime home-buying 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."