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Economy in Brief

U.S. FHFA House Price Increases Moderate
by Tom Moeller  September 21, 2017

The Federal Housing Finance Agency's (FHFA) index of U.S. house prices rose 6.3% y/y during July compared to a peak 7.0% y/y gain in April. Recent figures show an even sharper deceleration in house price inflation. During the last three months, prices improved at a slow 2.8% annual rate. In July, prices rose 0.2% following a 0.1% June uptick. These gains compared to monthly increases in the range of 0.4%-to-0.9% during the prior four months.

The performance of home prices continued to vary greatly around the country. On the strong side were the Pacific and Mountain regions where prices rose 8.2% y/y. Over the last three months, however, prices rose at 3.4%-to-4.4% annual rates.

These strong y/y gains were followed by the South Atlantic, East South Central, New England and East South Central regions where prices rose roughly 6.0% y/y. Recently, however, gains have slowed sharply.

Slower house price inflation occurred amongst states in Middle Atlantic region where prices rose 4.4% y/y. The rate of gain during the last three months declined more sharply to 1.4%. In the West North Central region, prices rose 4.2% y/y and at a 1.7% rate in the last three months.

In New England, home prices have not risen on average during the last three months, and in the South Atlantic & East North Central states, gains have slowed markedly to 1.0% to 3.0%.

An exception to the slowdown story is the East South Central region where home price inflation remained a firm 9.4% during the last three months.

The FHFA house price index is a weighted repeat sales index, measuring average price changes in repeat sales of the same property. An associated quarterly index also includes refinancings on the same kinds of properties. The indexes are based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The FHFA data are available in Haver's USECON database.

FHFA U.S. House Price Index,
Purchase Only (SA %)
Jul Jun May Jul Y/Y 2016 2015 2014
Total 0.2 0.1 0.4 6.3 6.2 5.6 5.4
  Pacific -0.5 0.4 1.1 8.2 8.1 8.0 9.4
  Mountain 0.3 0.3 0.3 8.2 8.0 7.9 7.2
  South Atlantic 0.4 -0.0 0.1 6.6 7.2 6.5 5.8
  East South Central 0.5 1.2 0.6 6.4 5.3 4.8 3.5
  New England 0.2 0.3 -0.5 6.1 4.0 3.6 3.1
  East North Central 0.6 -0.0 0.2 5.9 5.4 4.5 4.5
  West South Central -0.0 -0.6 1.0 5.5 6.1 6.4 5.6
  Middle Atlantic 0.5 0.4 -0.5 4.4 3.6 2.7 2.2
  West North Central -0.5 0.2 0.7 4.2 5.7 4.3 4.1


Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico.
South Atlantic: Delaware, Maryland, D.C., Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida.
Pacific: Alaska, California, Hawaii, Oregon, Washington.
West South Central: Oklahoma, Arkansas, Texas and Louisiana.
East North Central: Michigan, Wisconsin, Illinois, Indiana and Ohio.
East South Central: Kentucky, Tennessee, Mississippi and Alabama.
New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut.
Middle Atlantic: New York, New Jersey and Pennsylvania.
West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri.

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