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U.S. House Prices Increase Slightly

HPI Shows Quarterly Increase and First Annual Increase Since 2007

FOR IMMEDIATE RELEASE
5/23/2012

​Washington, D.C. – U.S. house prices rose modestly in the first quarter of 2012 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only House Price Index (HPI). The FHFA HPI was up 0.6 percent on a seasonally adjusted basis since the fourth quarter of 2011. The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Seasonally adjusted house prices rose 0.5 percent from the first quarter of 2011 to the first quarter of 2012. FHFA’s seasonally adjusted monthly index for March was up 1.8 percent from February.

"Consistent with other housing market indicators, the FHFA HPI showed stronger house prices in the first quarter, most notably in March," said FHFA Principal Economist Andrew Leventis. "Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices."

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transactions information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 0.2 percent over the latest quarter. Over the latest four quarters, the index is down 1.3 percent. For individual states, price changes reflected in the expanded-data measure and the traditional purchase-only HPI are compared on pages 24-26.

While the national, purchase-only house price index rose 0.5 percent from the first quarter of 2011 to the first quarter of 2012, prices of other goods and services rose 3.2 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 2.6 percent over the latest year.

Significant Findings:

  • The seasonally adjusted purchase-only HPI rose in the first quarter in 30 states and the District of Columbia.

  • The top five annual increases were Hawaii (10.3 percent), Washington, DC (9.8 percent), Iowa (5.7 percent), Florida (4.7 percent) and North Dakota (4.4 percent).

  • Of the nine census divisions, the Mountain division experienced the strongest prices in the latest quarter, posting a 1.4 percent price increase. Prices were weakest in the New England division, where prices fell -0.7 percent.

  • As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., first-quarter price increases were greatest in the Houston-Sugar Land-Baytown, TX area. That area saw price increases of 2.4 percent between the fourth quarter of 2011 and the first quarter of 2012. Prices were weakest in Atlanta-Sandy Springs-Marietta, GA, where prices declined 3.3 percent over that period.

The complete list of state appreciation rates is on pages 20-21. The list of metropolitan area appreciation rates computed in a purchase-only series is on page 35. Appreciation rates for the all-transactions metropolitan area indexes are on pages 38-52.

Research Note

"Distress-free" house price indexes, which eliminate the effects of Real Estate Owned (REO) and short sale transactions from the data sample, are discussed in this quarter’s Research Note. FHFA has been evaluating various options for producing such metrics to omit the direct effects of short sales and REO transactions on the HPI. One option involves using a new appraisal database available to Fannie Mae and Freddie Mac. The Research Note illustrates how the appraisal data could be used to identify—and ultimately remove—distressed transactions from FHFA’s data sample.

Background

FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings on 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 45 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 37 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. Pursuant to the terms of various short-term Congressional initiatives, loan limits for mortgages originated between July 1, 2007 and Sept. 30, 2011 were as high as $729,750 in certain high-cost areas in the contiguous U.S. Mortgages originated after Sept. 30, 2011 were no longer subject to the terms of those initiatives and, under the formula established under the Housing and Economic Recovery Act of 2008, the "ceiling" limit for one-unit properties in the contiguous U.S. fell to $625,500.

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 second quarter of 2012, will be released Aug. 23, 2012.

  • The next monthly index, which will include data through April 2012, will be released June 21, 2012.

Click here to view the Report

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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

Contacts:
​Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030
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