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US home prices continued their rise in the last quarter of 2023, though they showed slower growth compared to the prior quarter.
The Federal Housing Finance Agency on Tuesday said home prices climbed 6.5% year-over-year in the fourth quarter, up 1.5% from the third quarter, and up 0.1% on a seasonally-adjusted basis in December compared to November.
"U.S. house prices increased modestly over the course of 2023," said Dr. Anju Vajja, acting deputy director for FHFA's Division of Research and Statistics. "However, the market showed signs of softening as house price appreciation was lower in the fourth quarter of the year than in the previous quarter."
Home prices were up across almost the whole of the US, with values rising in 49 states in the past year. Rhode Island led the way with a 15.1% price gain, followed by Vermont at 13.3%, West Virginia at 12.4%, Connecticut at 12.2%, and New Jersey at 11.4%.
Hawaii and the District of Columbia were the only markets that saw a downturn, with a 3.4% and 1.2% decrease in home prices, respectively.
The housing market has been hobbled by a persistent lack of inventory across many markets. That's been exacerbated by high mortgage rates, which have discouraged owners from listing their house for sale as they hold onto low rates they locked in during the historic lows seen during the pandemic.
The 30-year fixed mortgage rate to has climbed back above 7% in recent weeks as the timelines for rate cuts by the Federal Reserve continue to get pushed out.
All nine of the FHFA's census divisions have reported positive year-over-year house price changes, with New England leading with a 10.3% annual increase in the fourth quarter, while the West South Central division had the smallest rise at 3.2%.
