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Economy in Brief

U.S. FHFA Monthly Price Increase May Have Reached an Inflection Point in June
by Kathleen Stephansen, CBE  August 30, 2022

• House prices rose minimally in June.

• House prices posted monthly declines in five out of nine regions.

The Federal Housing Finance Agency (FHFA) House Price Index rose 0.1% in June, following a 1.3% rise in May, revised from 1.4%. The small monthly rise in June broke the streak of 24 consecutive monthly increases of 1% or higher. The year-on-year rise stood at 16.2%, down from 18.3% in May. Housing prices had continued to rise quickly during the second quarter but a marked deceleration in the monthly data emerged in June.

Monthly regional data show an inflection point in many regions. The Mountain states posted a monthly decline of 0.9% in housing prices during June, the first since May 2020, though prices were still up 18.1% from a year ago. The West North Central region posted a monthly price decline of 0.7% (+12.4% y/y), also the first decline since May 2020, while housing prices posted the second consecutive monthly decline in the Pacific region, dropping by 0.6% (+13.2% y/y). The other two regions showing monthly price declines in June were New England, dropping by 0.5% (14.4% y/y) and the East North Central region, with a decline of 0.4% (+12.7% y/y). Monthly increases in other regions ranged from 0.3% in West South Central to 1.4% in the East South Central region.

Year-on-year advances were the strongest in the South Atlantic region, 21.7%, followed by a yearly rise of 19.0% in the East South Central region and the 18.1% previously-mentioned rise in the Mountain states.

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.

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