First American Data & Analytics Releases Monthly Home Price Index Report with August 2023 Data

—Price tier analysis shows demand is “down filtering” to starter and mid-priced tiers—

First American Data & Analytics, a leading national provider of property-centric information, risk management and valuation solutions and a division of First American Financial Corporation (NYSE: FAF), today released its August 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. The full report can be found here.

August 2023 House Price Index Highlights

The First American Data & Analytics’ non-seasonally-adjusted (NSA) House Price Index (HPI) showed that nationally in August¹ 2023:

• House prices increased 0.7 percent between July 2023 and August 2023.
• House prices increased 5.6 percent between August 2022 and August 2023.
• House prices reached a new peak in August 2023.

“Despite affordability challenges driven by elevated mortgage rates, preliminary August data indicates that home prices increased month over month for the eighth consecutive month,” said Mark Fleming, chief economist at First American. “Rising mortgage rates decrease affordability for buyers, but also increase the rate lock-in effect that is currently restricting supply. The net result is rising prices, even as mortgage rates also increase.”

August 2023 House Price State² Highlights

• The five most populous states experienced the following year-over-year growth in the HPI: California (+2.4 percent), Texas (+2.8 percent), Florida (+2.6 percent), New York (+1.4 percent), and Pennsylvania (+7.9 percent).
• The only state with a year-over-year decrease in the HPI is Nevada (-1.7 percent).
• Full 50-state HPI data is available here.

August 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: Warren, Mich. (+6.9 percent), St. Louis (+6.6 percent), Anaheim, Calif. (+6.5 percent), Baltimore (+5.8 percent), and Cambridge, Mass. (+5.7 percent).
• Among the 30 Core-Based Statistical Areas (CBSAs) tracked by First American Data & Analytics, the three markets with a year-over-year decrease in the HPI are: Austin, Texas (-5.1 percent), Phoenix (-2.0 percent), and Las Vegas (-1.9 percent).
• Data for the largest 30 CBSAs by population is available here.

August 2023 Local Market Price Tier Highlights

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 old adage of real estate being local includes sub-markets within a local area, particularly sub-markets defined by price. Changes in mortgage rates affect borrowers trying to buy their first ‘starter’ home differently than luxury buyers," said Fleming. “A pattern emerging within many local markets indicates the starter tier remains a strong sellers’ market with large year-over-year price gains, followed by strong performance in the mid-tier price range that is often outperforming the luxury tier. Limited supply, coupled with rising mortgage rates, impacts affordability and the financial incentive to sell across the income spectrum and is driving potential move-up home buyers to ‘down-filter’ toward lower priced homes in the starter and mid-price tiers."

The latest First American research on market dynamics is available here.

Next Release

The next release of the First American Data & Analytics House Price Index will take place the week of October 16, 2023.

First American Data & Analytics HPI Methodology

The First American Data & Analytics HPI report measures single-family home prices, including distressed sales, with indices updated monthly beginning in 1980 through the month of the current report. HPI data is provided at the national, state and CBSA levels and includes preliminary index estimates for the month prior to the report (i.e. the preliminary result of July transactions is reported in August). The most recent index results are subject to revision as data from more transactions become available.

The HPI uses a repeat-sales methodology, which measures prices changes for the same property over time using more than 46 million paired transactions to generate the indices. In non-disclosure states, the HPI utilizes a combination of public sales records, MLS sold and active listings, and appraisal data to estimate house prices. This comprehensive approach is particularly effective in areas where there is limited availability of accurate sale prices, such as non-disclosure states. Property type, price and location data are used to create more refined market segment indices. Real Estate-Owned transactions are not included.

Disclaimer

Opinions, estimates, forecasts and other views contained in this page are those of First American’s Chief Economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American’s business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2023 by First American. Information from this page may be used with proper attribution.

About First American Data & Analytics

First American Data & Analytics, a division of First American Financial Corporation, is a national provider of property-centric information, risk management and valuation solutions. First American maintains and curates the industry’s largest property and ownership dataset that includes more than 8 billion document images. Its major platforms and products include: DataTree^®, FraudGuard^®, RegsData^®, First American TaxSource™ and ACI^®. Find out more about how First American Data & Analytics powers the real estate, mortgage and title settlement services industries with advanced decisioning solutions at www.FirstAmDNA.com.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 130 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.6 billion in 2022, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2023, First American was named one of the 100 Best Companies to Work For by Great Place to Work^® and Fortune Magazine for the eighth consecutive year and was named one of the 100 Best Workplaces for Innovators by Fast Company. More information about the company can be found at www.firstam.com.

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¹ The most recent index results are subject to revision as data from more transactions become available.

² The HPI for non-disclosure states and markets that fall within non-disclosures states are not included in this month’s HPI report.

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