FMHPI house price index change 1990-2023
The U.S. housing market has slowed, after 12 consecutive years of rising home prices. In 2021, house prices surged by an unprecedented 18 percent, marking the highest increase on record. However, the market has since cooled, with the Freddie Mac House Price Index showing more modest growth of 4.8 percent in 2022 and 6.5 percent in 2023. That was faster than the long-term average of 4.4 percent since 1990.
Impact of mortgage rates on homebuying
The recent cooling in the housing market can be partly attributed to rising mortgage rates. After reaching a record low of 2.96 percent in 2021, the average annual rate on a 30-year fixed-rate mortgage more than doubled in 2023. This significant increase has made homeownership less affordable for many potential buyers, contributing to a substantial decline in home sales. Despite these challenges, forecasts suggest a potential recovery in the coming years.
How much does it cost to buy a house in the U.S.?
In 2023, the median sales price of an existing single-family home reached a record high of over 389,000 U.S. dollars. Newly built homes were even more expensive, despite a slight decline in the median sales price in 2023. Naturally, home prices continue to vary significantly across the country, with West Virginia being the most affordable state for homebuyers.
