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U.S. House Prices Rose 1.4 Percent in Fourth Quarter 2012


Washington, D.C. – U.S. house prices rose 1.4 percent from the third quarter to the fourth quarter of 2012 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only House Price Index (HPI). The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Seasonally adjusted house prices rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012. FHFA’s seasonally adjusted monthly index for December was up 0.6 percent from November.

"The fourth quarter was another strong one for house prices, as it was the third consecutive quarter where U.S. price growth exceeded one percent," said FHFA Principal Economist Andrew Leventis. "While a significant number of homes remained in the foreclosure pipeline, the actual number of homes available for sale was very low and fell over the course of the quarter."

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transaction information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 1.6 percent over the latest quarter. Over the latest four quarters, that index is also up 5.5 percent. For individual states, price changes reflected in the expanded data measure and the traditional purchase-only HPI are compared on pages 23-25 of this report.

While the national, purchase-only house price index rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012, prices of other goods and services rose 1.7 percent over the same period. Accordingly, the inflation-adjusted price of homes rose approximately 3.7 percent over the latest year.

Significant Findings:

  • The seasonally adjusted purchase-only HPI rose in the fourth quarter in 38 states and the District of Columbia.

  • Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent price increase. House prices were weakest in the East North Central division, where prices remained unchanged from the prior quarter.

  • As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., fourth quarter price increases were greatest in the Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area (MSA). That area saw prices increase by 6.8 percent between the third and fourth quarters. Prices were weakest in the Edison-New Brunswick, NJ metropolitan division, where prices fell 0.8 percent over that period.

  • The monthly seasonally adjusted purchase-only index for the U.S. has increased for 11 consecutive months.

  • FHFA’s new "distress-free" house price index suggests that price gains in the latest quarter may be partially attributed to decreases in the share of distressed sales in the latest quarter. For 9 of the 12 metropolitan areas covered by the new set of indexes, the distress-free measures—which remove the direct effect of short sales and sales of bank-owned properties—showed more modest price gains than were evident in the traditional purchase-only indexes.

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 39-52.


This quarter’s Highlights article analyzes the recent gap that has developed between appreciation reflected in the purchase-only index and the all-transactions metric. The latter index, which incorporates appraisals from refinance mortgages into the index estimation sample, has shown very modest price growth relative to the purchase-only index. Hypotheses are tested for why the growth in appraisal values has been noticeably different than for sales prices.


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 47 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 38 years.

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 302 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.

  • The next quarterly HPI report, which will include data for the first quarter of 2013, will be released May 23, 2013.

  •  The next monthly index, which will include data through January 2013, will be released Mar. 21, 2013.

  •  HPI release dates for 2013 are available at www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx.

Click here to view the Report



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.

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