Washington, D.C. – U.S. house prices rose in the second quarter of 2010 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only House Price Index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 0.9 percent higher on a seasonally adjusted basis in the second quarter than in the first quarter of 2010. The unadjusted national increase was 2.6 percent. Over the past year, seasonally adjusted prices fell 1.6 percent from the second quarter of 2009 to the second quarter of 2010.

FHFA’s seasonally adjusted monthly index for June was down 0.3 percent from its May value, offsetting some of the price increases in the prior months. The monthly increase for the April to May period was revised downward to 0.4 percent, from an initial estimate of 0.5 percent.

While the national, purchase-only house price index fell 1.6 percent from the second quarter of 2009 to the second quarter of 2010, prices of other goods and services rose 3.0 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 4.4 percent over the latest year.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, fell over the latest quarter. The index declined 0.5 percent in the latest quarter and 4.9 percent over the four-quarter period.

Significant Findings:

• Of the nine Census Divisions, the East North Central and New England Divisions experienced the most significant price movements in the latest quarter according to the seasonally adjusted, purchase-only index. While prices rose 1.6 percent in the East North Central Division, prices fell 0.7 percent in the New England Division.

• Seasonally adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 27 states. Prices rose over the latest four quarters in 10 states and Washington, D.C.

• As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Phoenix-Mesa-Glendale, AZ area. That area saw price declines of 5.5 percent between the second quarters of 2009 and 2010. Prices held up best in the Oakland-Fremont-Hayward, CA (MSAD) area, where prices rose 9.9 percent over that period.

The complete list of state appreciation rates are on pages 15 and 16.

The complete list of metropolitan area appreciation rates computed in a purchase-only series are on page 27 and all-transactions indexes are on pages 30–45.

Highlights

This quarter’s Highlights article describes a unique repeat-transactions price index that has been constructed for condominium and cooperative properties (condos) in three MSA’s: the New York-White Plains-Wayne, NY-NJ MSAD; the Washington-Arlington-Alexandria, DC-VA-MD-WV MSAD; and the Denver-Aurora-Broomfield, CO MSA. The indexes are calculated using data provided by Dataquick. FHFA currently excludes condos from its repeat transactions sample when estimating the HPI. The Highlights article compares a condo-specific HPI to the FHFA HPI for the same area and examines differences in the appreciation rates implied by the two indexes.

Background

FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 40 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 35 years.

FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Loan limits for mortgages originated in the latter half of 2007 through Dec. 31, 2008 were raised to as much as $729,750 in high-cost areas in the continental United States. Legislation generally extended those limits for 2009-originated mortgages. A Congressional Continuing Resolution (PL111-88) further extended those limits for 2010 originations in places where the limits were higher than those that would have been calculated under pre-existing rules.

This HPI report contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by Census Division and for the U.S. as a whole; 3) A ranking of 303 MSAs and Metropolitan Divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked.

• Please e-mail FHFAinfo@fhfa.gov for a printed copy of the report.

• The next quarterly HPI report, which will include data for the third quarter of 2010, will be released November 24, 2010.

• The next monthly index, which will include data through July 2010, will be released September 22, 2010.

Click here to view the Report