House Prices Declining Fastest in Overvalued Markets

First American Real House Price Index

Date:

Autor: Funds Society, Miami

The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability

“In November 2022, the RHPI increased by 60 percent on an annual basis. This rapid annual decline in affordability was driven by two factors -- a 7.6 percent annual increase in nominal house prices and a 3.7 percentage point increase in the average 30-year, fixed mortgage rate compared with one year ago," Mark Fleming, chief economist at First American