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Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the Federal Housing Finance Agency's House Price Index.
- The Federal Housing Finance Agency released its monthly house price index (HPI) today. The price index for purchase loans (vs. refinances) eased 0.3% from December to January. This decline follows a downwardly revised 1.0% decrease a month earlier. The purchase HPI was 3.9% lower in January than a year earlier, but this is an improvement for the 4.6% year-over-year decline registered in November.
- The year-over-year decline in the FHFA’s index confirms the trend in NAR’s median price figure for January released a month earlier. An influx of distressed sales and investor purchases has placed downward pressure on prices in recent months.
- The FHFA index is a narrower measure, though, which covers conforming loans purchased or securitized by Fannie Mae and Freddie Mac, but omits mortgages backed by the FHA, which accounted for roughly 15% of home sales in December. Furthermore, the FHFA’s index does not include cash transactions, which were roughly 33% of sales in February according to NAR’s REALTORS® Confidence Index. The all-cash component has grown in recent months due to tougher credit restrictions.
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