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Economy in Brief

U.S. FHFA House Price Index Continues to Soar in January
by Sandy Batten  March 30, 2021

• House prices rose 1.0% m/m, the eighth consecutive monthly increase of 1.0% or more.

• Though still elevated, monthly gains seem to be moderating.

• Prices were up 12.0% y/y, a series record annual increase dating back to 1991.

The Federal Housing Finance Agency (FHFA) House Price Index increased 1.0% m/m in January following an upwardly revised 1.2% m/m gain in December (initially 1.1%). This was the eighth consecutive month in which house prices had risen by 1.0% or more. Prior to this eight-month run, this index had risen 1% or more in only six months in the series history dating back to January 1991. Compared to a year ago, house prices were up 12.0%, the highest annual rate of increase in the series history. Over the past eight months, house prices rose 16.3% annualized, also their highest eight-month advance in the series. Though still elevated, the pace of monthly gains seems to be moderating from the record 1.6% m/m increase reported in post August and September last year. The January monthly rise was the smallest increase since last May.

House prices rose in each census division in January from a year ago and in every region except the East South Central in January from December. Seasonally adjusted monthly house price changes in January from December ranged from -0.2% m/m in the East South Central region (some payback from the outsized 1.5% m/m gain posted in December) to +1.5% in the Mountain region. The 12-month changes ranged from +10.2% in the West South Central region to +14.8% in the Mountain region. Annual advances were at series highs in five of the nine 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 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 %)
Jan Dec Nov Jan Y/Y 2020 2019 2018
Total 1.0 1.2 1.1 12.0 7.8 5.3 6.4
  New England 0.8 0.9 1.4 13.4 8.2 4.6 5.2
  Middle Atlantic 1.4 1.1 1.0 12.7 7.4 4.5 5.2
  East North Central 0.9 1.3 1.0 12.0 7.7 5.4 6.3
  West North Central 1.0 0.7 0.5 10.7 7.2 5.1 5.8
  South Atlantic 1.0 1.0 1.2 11.7 8.0 5.6 6.8
  East South Central -0.2 1.5 1.3 11.0 8.2 5.7 6.0
  West South Central 1.2 1.3 0.3 10.2 6.3 4.6 5.1
  Mountain 1.5 1.4 1.4 14.8 9.8 7.0 9.0
  Pacific 1.1 1.2 1.6 12.9 7.9 4.7 7.2
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