FHFA Monthly House Price Index

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s second update discusses the FHFA monthly house price index.

• Home prices rose 6.5 percent for the 12 months ending in January 2013 according to the Federal Housing Finance Agency (FHFA), marking the 12th straight month of year-over-year gains. In the same period, prices reported by NAR rose 10.4 percent, which was the 11th consecutive month of year-over-year gains. NAR data for February, released today, shows continuing double-digit house price increases.
• NAR reports the median price of all homes that have sold while FHFA reports the results of a weighted repeat-sales index. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property. However, the NAR median price tends to be a good indicator of the trend in repeat-sales price indexes.
• Drilling down to the Census Division level, FHFA data show that monthly growth was strongest in the West (Pacific and Mountain divisions) and South Atlantic United States. The East South Central division, New England and the Middle Atlantic saw slight declines for the month.
• Year-over-year growth patterns, which are generally more indicative than monthly movements, are similar to the monthly trend in January. The largest year-over-year price gains are seen in the Mountain, Pacific, and South Atlantic divisions while the smallest gain was in the Middle Atlantic division.