The Federal Housing Finance Agency's (FHFA) index of U.S. house prices rose 6.5% y/y during December. The rate of increase has improved from 5.3% in 2014 and contrasts to the house price deflation from 2008 to 2011. In the month of December alone, house prices rose 0.3% m/m, the smallest increase in six months. Over the past three months, prices have risen at a reduced 5.6% annual rate.

The annual performance of home prices continued to vary significantly across the country. On the strong side were the Mountain and Pacific regions where prices rose roughly 9.0% from December-to-December.

These relatively strong y/y gains were followed by the South Atlantic, West South Central, New England and East North Central regions where prices increased roughly 6.0% y/y.

Slower annual house price appreciation occurred in the Middle Atlantic, East South Central and West North Central regions.

The FHFA house price index is a weighted purchase-only index that measures 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.