Home prices rose 6.5% in the third quarter from the same period last year, according to the Federal Housing Finance Agency’s Home Price Index. They increased by 1.4% from the second quarter.
Home price appreciation should slow somewhat as housing becomes less affordable to consumers, but there isn’t much evidence of this yet, according to FHFA Deputy Chief Economist Andrew Leventis.
“With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread,” Leventis said in a press release. “At some point, declining housing affordability should temper appreciation rates in some of the nation’s fastest appreciating markets, but our third-quarter results show few signs of that.”
Home prices rose in all 50 states and the District of Columbia year-over-year in this year’s third quarter. The District of Columbia led in annual price appreciation, followed by Washington and Hawaii.
Home prices also rose in each of the nation’s 100 largest cities. Price increases between the third quarter of 2016 and the third quarter of 2017 were greatest in the Seattle metro area, and weakest in Camden, N.J., where they only grew 0.5% compared to Seattle’s 14.6% rise.
By census division, home prices experienced the greatest annual appreciation rates in the Pacific and the weakest in the Middle Atlantic Division in the third quarter.
The FHFA’s HPI is calculated based off mortgages sold to or guaranteed by Fannie Mae or Freddie Mac, with most price changes reflected in the report based on purchase loans.