House Price Index is Increasing in the United States in 2023

By Shubhendra Anand , 14 November, 2023

House prices in the United States are growing daily in 2023, as the Federal Housing Finance Agency (FHFA) data shows. Single-family home prices in the United States are seeing an exponential price increase in 2023.

In the United States, house prices are increasing 2022 since it first showed an uptick in February 2022. According to Federal Housing Finance Agency (FHFA) data, the house price index in the United States has upgraded to 409 index points in July 2023; earlier in February, the house price index for the United States was 396 points. The Federal Reserve Bank said the median home sales price by the second quarter of 2023 is USD 416,100 compared to a median of USD 322,600 for the second quarter of 2020, an increase of 29 percent. The House Price Index is based on the transactions comprising conventional and conforming mortgages on single-family properties in the United States. As per the data given by FHFA in August 2023, there is a 3 percent inclination in the year-over-year home prices between the second quarter of 2022 and the second quarter of 2023. Between June 2022 and February 2023, the market failed to increase as high mortgage rates put pressure on the market by deterring investors and buyers.

The primary factor driving the mortgage rates was different measures adopted by the Federal Reserve to tame inflation. Through the House Price Index (HPI), the government keeps track of the investors to monitor the economic trends for their stock market. Increasing the hose prices can have a bigger impact on the economy. The rise in house prices in the United States also enhances consumer spending, helps to create more job opportunities in the market, and, thus, leads to progress in the economic growth of the United States. It also boosts the gross domestic product (GDP) of the country. Through higher consumer spending, the market helps sustain the economy's expansion. Thus, consumers are affected by the rise and fall of the price index, as consumers' confidence is also affected when prices start declining. Therefore, the increase in the house price index significantly impacts the consumers' spending in the country.