The Federal Housing Finance Agency (FHFA) said today that
home prices in the fourth quarter of 2014 were up 1.4 percent compared to the
previous quarter and 4.9 percent from the fourth quarter of 2013. The fourth quarter was the fourteenth
consecutive one in which the agency's purchase only House Price Index (HPI)
increased on a seasonally adjusted basis from the prior quarter.
The
monthly HPI for December, also reported today, was up 0.8 percent from
November. This measure has increased for 23 of
the last 24 months with the single decreased registered in November 2013
FHFA's index is calculated using home sales price
information from mortgages sold to or guaranteed by Fannie Mae and Freddie
Mac. An expanded data index using
transaction information from county recorders' offices and the FHA was up 1.3
percent quarter-over-quarter and was 6.0 percent higher than in the fourth
quarter of 2013.
"Contrary to prior indications of a
possible slowdown, home price appreciation in the fourth quarter was relatively
strong," said FHFA Principal Economist Andrew Leventis. "The key drivers
of appreciation over the last few years-low inventories of homes available for
sale, and improvement in labor markets-likely played a role in driving up
prices during the quarter."
The 4.9 percent annual increase in home
prices from the fourth quarter of 2013 outpaced the increase in prices of other
goods and services significantly with the latter rising only 0.4 percent during
the same period. Thus the
inflation-adjusted price of homes rose approximately 4.5 percent over the
latest year.
Year-over-year the purchase-only HPI
rose in 48 states and the District of Columbia. The top five areas in
annual appreciation were the District of Columbia, up 12.5 percent; Nevada with
a 9.0 percent increase, North Dakota which gained 8.4 percent followed by
Colorado (7.9 percent), and Michigan (7.8 percent.)
Among the 100 most populated
metropolitan areas in the U.S., fourth quarter price increases were greatest in
the San Francisco-Redwood City-South San Francisco, CA area, where prices
increased by 6.0 percent. Prices were weakest in the El Paso, TX MSA,
where they fell 6.6 percent.
Of the nine census divisions, the
Mountain division experienced the strongest increase in the fourth quarter,
posting a 1.8 percent quarterly increase and a 5.5 percent annual increase. House
price appreciation was weakest in the New England division, where prices fell
.03 percent.
FHFA's purchase-only index is based on
more than 7 million repeat sales transactions. It as well as FHFA's all-transactions
index are based on data obtained from Fannie Mae and Freddie Mac for mortgages
originated over the past 39 years.