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Economy in Brief

FHFA Home Price Index Improves Again
by Tom Moeller  July 24, 2012

The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) rose 0.8% during May following a 0.7% April increase. It was the fourth consecutive monthly gain and lifted the y/y increase to 3.7%. That gain followed four successive years of price decline. Price increases during the last year were across-the-board except in New England. Despite the improvement, prices on average remained 17.0% below the 2007 high. 

In the Pacific region prices have fallen by more than one-third since 2007's high and by one-quarter in the Mountain region. In the Mid-Atlantic region prices have fallen a lesser 10.4% while they've risen 2.6% in the West South Central states.  FHFA uses data provided by Fannie Mae and Freddie Mac and is not value-weighted.

The HPI is calculated using a repeat sales index. That means that the HPI measures changes in the price of the same property over time but does not measure changes in property types over time. So if, for example, the price of a larger, new home was not growing very rapidly, but the number of people transitioning from smaller homes to larger homes greatly increased, median house prices would go up (people buying more expensive houses) much more than the HPI. In this way, the HPI is a better measure of how any particular home is appreciating while the median house price is a better measure of what the typical home buyer is paying.

The FHFA data is available in Haver's USECON database.

FHFA U.S. House Price Index Purchase Only (SA %) May Apr Mar Y/Y 2011 2010 2009
Total 0.8 0.7 1.7 3.7 -4.2 -2.8 -5.1
  New England 1.4 -0.9 0.8 0.0 -2.1 -2.0 -2.5
  Middle Atlantic 0.5 -0.1 1.4 0.5 -3.3 -1.1 -3.0
  East North Central 1.5 0.1 2.7 4.4 -3.8 -3.1 -3.6
  West North Central 0.8 -0.3 1.2 3.3 -3.5 -1.9 -1.4
  South Atlantic 0.6 1.2 0.7 4.1 -5.3 -4.9 -7.5
  East South Central 0.0 -0.4 2.9 3.6 -2.8 -2.7 -2.1
  West South Central -1.0 1.5 0.9 3.9 -1.1 -0.3 -0.0
  Mountain 1.3 1.8 1.4 6.3 -6.8 -6.4 -10.9
  Pacific 1.7 1.4 2.9 4.4 -7.2 -2.2 -11.1
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