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U.S. House Prices Rise 1.2 Percent in Second Quarter

FHFA House Price Index Up for 16 Consecutive Quarters

FOR IMMEDIATE RELEASE
8/25/2015

Washington, D.C. – U.S. house prices rose 1.2 percent in the second quarter of 2015 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).  This is the 16th consecutive quarterly price increase in the purchase-only, seasonally adjusted index.  FHFA's seasonally adjusted monthly index for June was up 0.2 percent from May. House prices rose 5.4 percent from the second quarter of 2014 to the second quarter of 2015.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.   

"Home price growth in the second quarter once again far exceeded the pace of overall inflation, even as mortgage rates drifted upwards," said FHFA Principal Economist Andrew Leventis.  "Although too early to tell whether it's a sign of a slowdown, the monthly appreciation rate in June was more modest than we have seen in a while."

The seasonally adjusted, purchase-only HPI rose 5.4 percent from the second quarter of 2014 to the second quarter of 2015, while prices of other goods and services fell 1.4 percent.  The inflation-adjusted price of homes thus rose approximately 6.9 percent over the latest year.

Significant Findings

  • Home prices rose in every state between the second quarter of 2014 and the second quarter of 2015.  The top five areas in annual appreciation: 1) Colorado – 10.6 percent, 2) Nevada – 10.5 percent, 3) Florida – 9.7 percent, 4) Hawaii – 9.5 percent, and 5) Washington – 8.8 percent.
  • Among the 100 most-populated metropolitan areas in the U.S., four-quarter price increases were greatest in San Francisco-Redwood City-South San Francisco, CA (MSAD), where prices increased by 18.3 percent.  Prices were weakest in the Allentown-Bethlehem-Easton, PA-NJ, where they fell -1.1 percent.
  • Of the nine census divisions, the South Atlantic division experienced the strongest increase in the second quarter, posting a 1.7 percent quarterly increase and a 6.1 percent increase since last year.  House price appreciation was weakest in the Middle Atlantic division, where prices were flat in the second quarter.

The attached packet provides tables and graphs showing home price statistics for metropolitan areas, states, census divisions, and the U.S. as a whole. 

Other Price Indexes
Most statistics in the attached release reference price changes computed by FHFA's basic "purchase-only" HPI.  In some cases, however, the reported statistics reference alternative price measures.  FHFA publishes – and makes available for download – three additional varieties of home price index beyond the basic "purchase-only" series.  Although they all use the same basic methodology, the three alternatives rely on slightly different datasets in index estimation.  

The alternative measures include:

  • "Distress-Free" house price indexes.  Sales of bank-owned properties and short sales are removed from purchase-only dataset prior to estimation of the indexes.
  • "Expanded-Data" house price indexes.  Sales price information sourced from county recorder offices and from FHA-endorsed mortgages are added to the purchase-only data sample.   
  • "All-Transactions" house price indexes.  Appraisal values from refinance mortgages are added to the purchase-only data sample.

For some geographic areas, multiple index types are available.  For instance, for individual states, three types of indexes are available.  The various series tend to correlate closely over the long-term, but short-term differences can be significant. 

Background

FHFA's HPI tracks changes in average home prices by analyzing changes in home values for the individual properties.  The underlying "repeat-transactions" methodology constructs index estimates by statistically evaluating price appreciation (or depreciation) for homes with multiple values over time.  The purchase-only HPI uses sales price information from Enterprise-purchased and Enterprise-guaranteed mortgages originated over the past 40 years.  More than seven million repeat sales transactions are used in the estimation of the purchase-only HPI.

Note

  • The next monthly index (including data through July 2015) will be released September 22, 2015.
  • The next quarterly HPI report, which will include data for the third quarter of 2015, will be released November 25, 2015. 
  • Follow @FHFA on Twitter for more HPI news.
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​The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide nearly $5.7 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFAYouTube and LinkedIn.

Contacts:

Media: Corinne Russell (202) 649-3032 ​/ Stefanie Johnson (202) 649-3030 
Consumers: Consumer Communications or (202) 649-3811

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