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News Release

U.S. House Prices Rise 1.3 Percent in First Quarter; 19 Consecutive Quarterly Increases

FOR IMMEDIATE RELEASE
5/25/2016

Washington, D.C. – U.S. house prices rose 1.3 percent in the first quarter of 2016 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).  This is the nineteenth consecutive quarterly price increase in the purchase-only, seasonally adjusted index.  House prices rose 5.7 percent from the first quarter of 2015 to the first quarter of 2016.  This is the fourth consecutive year in which prices grew more than 5 percent. FHFA's seasonally adjusted monthly index for March was up 0.7 percent from February.  The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.  FHFA has produced a video of highlights for this quarter. 

"While the overall appreciation rate was robust in the first quarter, home price appreciation was somewhat less widespread than in recent quarters," said FHFA Supervisory Economist Andrew Leventis.   "Twelve states and the District of Columbia saw price declines in the quarter—the most areas to see price depreciation since the fourth quarter of 2013.  Although most declines were modest, such declines are notable given the pervasive and extraordinary appreciation we have been observing for many years."

While the purchase-only HPI rose 5.7 percent from the first quarter of 2015 to the first quarter of 2016, prices of other goods and services were nearly unchanged.  The inflation-adjusted price of homes rose approximately 5.6 percent over the latest year.

Significant Findings

  • Home prices rose in every state between the first quarter of 2015 and the first quarter of 2016.  The top five states in annual appreciation were:  1) Oregon 11.8 percent; 2) Florida 11.2 percent; 3) Washington 10.9 percent; 4) Nevada 9.4 percent; and 5) Colorado 9.0 percent.
  • Among the 100 most populated metropolitan areas in the U.S., annual price increases were greatest in the West Palm Beach-Boca Raton-Delray Beach, FL (MSAD), where prices increased by 16.7 percent.  Prices were weakest in El Paso, TX, where they fell 2.8 percent. 
  • Of the nine census divisions, the Pacific division experienced the strongest increase in the first quarter, posting a 1.9 percent quarterly increase and an 8.1 percent increase since the first quarter of last year.  House price appreciation was weakest in the Middle Atlantic division, where prices rose 0.6 percent from the last quarter. 

Tables and graphs showing home price statistics for metropolitan areas, states, census divisions, and the U.S. as a whole are included on the following pages. 

Other Price Indexes
Most statistics in the quarterly house price index report 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 home price indexes beyond the basic "purchase-only" series.  Although they use the same general methodology, the three alternatives rely on slightly different datasets as follows: 

  • "Distress-Free" house price indexes.  Sales of bank-owned properties and short sales are removed from the 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-backed mortgages are added to the purchase-only data sample.  This index is used annually to adjust the maximum conforming loan limits, which constrain the size of loans that can be acquired by Fannie Mae and Freddie Mac.
  • "All-Transactions" house price indexes.  Appraisal values from refinance mortgages are added to the purchase-only data sample.

Data constraints preclude the production of all types of indexes for every geographic area, but multiple index types are generally available.  For individual states, for instance, three types of indexes are available.  The various indexes tend to correlate closely over the long-term, but short-term differences can be significant. 

Release of New Experimental Indexes

With this quarter's release, FHFA is publishing a set of experimental annual house price indexes for five-digit ZIP codes across the country from 1975―2015.​ The indexes are constructed using the typical "repeat-transactions" methodology. Unlike FHFA's other price indexes, however, the five-digit ZIP code measures are annual price measures, meaning that a single index value is produced for each year.  As discussed in FHFA Working Paper 16-01, the new indexes may be valuable to analysts seeking data on localized home price movements.  More information about these measures is provided in a "Technical Note" in this report on page 23.

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 Fannie Mae- and Freddie Mac-purchased and Enterprise-guaranteed mortgages originated over the past 41 years.  The purchase-only HPI is estimated with over seven million repeat-transactions.

Note

  • The next monthly index (including data through April 2016) will be released June 22, 2016. 
  • The next quarterly HPI report, which will include data for the second quarter of 2016, will be released August 24, 2016. 
  • Future HPI release dates for 2016 are available at http://www.fhfa.gov/hpi.
  • Follow @FHFA on Twitter and YouTube​ 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 more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFA, YouTube 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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