Reported yesterday, the U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) increased slightly for the second month. The May index rose 0.4% after a 0.2% April uptick. The gain steadied the y/y decline at 6.3%. The greatest weakness over the last year has been in the South Atlantic, Mountain and Western 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.