Home prices have now increased on a quarterly
basis 12 consecutive times. The Federal
Housing Finance Agency (FHFA) said yesterday that the 12th increase in
its purchase-only seasonally adjusted House Price Index (HPI) was a 0.81
percent rise in the second quarter of 2014.
The seasonally adjusted monthly index for June was up 0.4 percent from
May, its seventh consecutive monthly increase and the 23rd month it
has gained out of the last 24.
A closer look at the quarterly numbers however
confirms the data reported by Case-Shiller, Core-Logic, and others; those price
increases are far from being as muscular as they once were.
increases peaked in Q2 of 2013 at 2.29 percent (9.14 percent annualized) and
annual increases hit a high of 8.30 percent in Q3. Since those mid-2013 periods all three
measures have plummeted. Quarterly appreciation
dropped to 1.80 percent in Q3 and 1.23 percent in Q4. There was a slight uptick to 1.31 percent in
the first quarter of 2014 before growth slowed to 0.81 percent in the most
recent quarter. Annual increases have slowed
even more steadily: 7.72 percent in the
fourth quarter of 2013 then 6.79 and 5.25 percent in the first two quarters of
2014. The annualized quarterly
appreciation in the second quarter was 3.24 percent.
extraordinary price appreciation observed over the last few spring seasons was
not evident in the second quarter of this year.
However, house price appreciation for the nation as a whole remained
positive," said FHFA Principal Economist Andrew Leventis. "FHFA's data indicate
that house price appreciation in the quarter was near or below the baseline
rate of inflation in most states."
adjusted, purchase-only HPI rose in 40 states during the second quarter of
2014, down from 42 states and the District of Columbia during the first quarter
of 2014. Annual appreciation was highest
in Nevada, California, District of Columbia, North Dakota, and Arizona.
The Pacific division experienced the strongest
increase in the second quarter, posting a 1.3 percent quarterly increase and a
9.8 percent increase since last year.
House prices were weakest in the East South Central division, where
prices decreased 0.1 percent from the prior quarter.
As measured with
purchase-only indexes for the 100 most populated metropolitan areas in the U.S.,
second quarter price increases were greatest in the WinstonSalem Metropolitan
Statistical Area (MSA) where prices increased by 4.6 percent. Prices were weakest in the Birmingham-Hoover,
Alabama area where they fell 4.9 percent.
Positive quarterly appreciation was recorded in 74 of the 100 MSAs.
The FHFA HPI is
calculated using home sales price information from mortgages sold to, or
guaranteed by, Fannie Mae and Freddie Mac.
The agency's expanded-data
house price index, a metric that adds transaction information from county
recorder offices and the Federal Housing Administration to the HPI data sample,
rose 1.3 percent over the prior quarter.
Over the last year, that index is up 6.2 percent.
"distress-free" house price indexes, which are published for 12 large
metropolitan areas (page 32), have recently reported lower quarterly appreciation
than FHFA's traditional purchase-only indexes.
In half of the areas covered, the series-which removes short sales and
sales of bank-owned properties-shows lower appreciation over the last quarter
than the purchase-only series. During
the last year, the share of Fannie Mae and Freddie Mac mortgages financing
distressed sales has fallen in all but two areas covered by the FHFA