September 13, 2023
Key Insights At National Level
U.S. home values for combined single-family detached and single-family attached properties increased by 2.8% in August 2023 from August 2022. The year-over-year numbers are expected to stay in positive territory through the end of the year, driven mainly by the significant home value depreciation trend experienced in the second half of last year.
On a month-over-month basis, non-seasonally adjusted (NSA) home values were basically flat in August, the first month without meaningful home values appreciation since February 2023. On a seasonally adjusted basis, monthly home values increased by 0.2%.
Both seasonally adjusted and unadjusted month-over-month numbers are now trending significantly below historical averages, suggesting that we might be reaching a new inflection point in the market. Home prices seem to be cooling off quickly, deterred by 20-year high interest rates and record low affordability.
Key Insights At State Level
On a year-over-year basis, the number of states recording annual home value depreciation continues to shrink and is now down to seven, namely Idaho, Nevada, Arizona, Utah, District of Columbia (DC), Colorado and Oregon.
However, on a month-over-month basis, there are 19 states that have recorded a decrease in non-seasonally adjusted home values for August 2023. Arkansas, Colorado, Kansas and Oregon show monthly home value decreases of more than 1%.
The month-over-month numbers show a significant trend shift from the previous month, when most states still experienced significant home value growth. The median monthly home value increase is down to 0.2% from 1.1% in the previous month.
Top 50 CBSA Markets
On a year-over-year basis, about one in three top 50 CBSA markets still experience annual home value depreciation. Austin (TX) is an outlier with more than 10% annual home value decrease, almost double the annual decrease of the next decliner group. At the other end, Hartford (CT), Cincinnati (OH) and Milwaukee (WI) continue to show solid year-over-year increases of around +9%.
On a non-seasonally adjusted month-over-month basis, almost half of the top 50 CBSA markets recorded price decreases in August, in sharp contrast from the previous month, when all top 50 markets showed home values appreciation. The median monthly home value change among the top 50 CBSA markets is now around 0%, down from +1.1% just a month ago.
Austin (TX) and Denver (CO) recorded the steepest monthly home value declines, around -2%, followed by San Francisco (CA), Portland (OR), Minneapolis (MN), New Orleans (LA) and Seattle (WA) with monthly price drops of about -1%. Cleveland (OH) and Hartford (CT) continue to consolidate their monthly gains, with home value increases around 2% in August 2023.
Why TerraIndex™ HPI
Our Home Price Index (HPI) is based on the proprietary Quantarium Valuation Model (QVM) value estimates for more than 100 million residential U.S. homes. QVM has been tested extensively in the last 5 years by some of the top third-party AVM testing agencies in the U.S. and has been consistently ranked at the top for both Accuracy and Hit Rate performance metrics. QVM was also recently approved by Fitch Ratings for Wall Street transactions. You can read the announcement here.
QVM re-computes the estimated values for the entire national footprint on a weekly basis, along with HPIs at various geography levels – from State, County, CBSA, down to Zip Code and Census Tract. Furthermore, the HPIs produced on any given date are based on proprietary valuation models which include over 90% of all sales transactions that will have been eventually reported through a four-week rolling period ending that date, taking advantage of Quantarium’s industry leading Data Services Platform (QDSP) to reduce the processing time lag to an absolute minimum. That allows Quantarium to provide the most current market insights, weeks faster than most other housing indices in the U.S. Learn more about TerraIndex™ HPI here.
The report for a given month is usually available on the second Wednesday of the following month, for example HPIs for the month of December 2022 were made available on Wednesday, January 11, 2023.
Located in Bellevue, WA, Quantarium was founded by a team of leading scientists and Ph.D.’s. The company has designed and developed an innovative and enabling set of AI and Visual Technologies currently being deployed across multiple real estate industry sectors. Quantarium is one of the most accurate sources of property insights for over 158 million U.S. properties and trusted by major mortgage lenders, financial institutes, builders, direct marketing agencies, and real estate professionals across the nation. With a technology suite that is different in kind, then degree, the company’s products and services uncover and capitalize on the core DNA of vertical industries. From genetic modeling property valuations and markets that understand and interpret real estate data as expressed through synthetic future populations, through to CV adjusted values, Quantarium offers real AI to drive real value.