Single-family home prices continue to rise, but at a slower pace than in recent quarters, according to the Fannie Mae Home Price Index.

The index data showed that home prices increased by 5.9% between the third quarter of 2023 and the third quarter of 2024. The increase was lower than the 6.4% annual growth rate registered in the second quarter.

On a quarterly basis, home prices rose a seasonally adjusted 1.3% in the third quarter of this year. That figure was down slightly from the revised 1.4% growth rate in the second quarter. The home price index is a national, repeat-transaction index measuring the average, quarterly price change for all single-family properties in the country, excluding condominiums.

“Despite decelerating slightly, home price growth remained robust in the third quarter, as the supply of homes for sale, particularly on the existing side, remained weak relative to historical levels,” said Mark Palim, Fannie Mae’s senior vice president and chief economist. “Even though mortgage rates fell precipitously in the third quarter, and we saw some improvements to the months’ supply of homes for sale, home purchase activity barely budged – at least on a national basis – which we view as evidence that the market remains significantly constrained by both the ‘lock-in effect’ and affordability generally, but especially elevated home prices.”

Palim said that in September, high home prices supplanted high mortgage rates as the top reason survey respondents were pessimistic about homebuying conditions. The strength of the latest home price reading confirms the ongoing challenges the market faces with a tight supply of homes, but the slowing pace of growth shows the market is slowly moving toward a better balance.