by two of the leading sources of home price information this morning confirm
the continued growth of home values in the U.S., at least through July. While their methodologies differ and direct
comparison is not possible, both showed substantial growth for the month. The Federal Housing Finance Agency (FHFA)
said its House Price Index (HPI) rose 1.0 percent on a seasonally adjusted
basis in July while S&P/Case-Shiller reported its 10-City Composite rose
1.9 percent and its 20-City Composite was up 1.8 percent.
the Case-Shiller Indices indicate that growth may be slowing, both its indices
rose 2.2 percent from May to June, the FHFA HPI showed month-over-month
appreciation at the highest level since March.
Case-Shiller reports that all 20 cities tracked by its two indices
showed monthly gains for the fourth consecutive month, but like the two composites,
15 of the cities had smaller gains in July than in June.
On an annual
basis the 10-City has gained 12.3 percent since July 2012 and the 20-City 12.4
percent and the deceleration in price gains was not as pronounced as in the
monthly returns. Thirteen of the 20
cities had larger annual increases in July than in June.
"Home prices gains are holding their 12% annual rate of gain established by the two Composite
indices in April," says David M. Blitzer, Chairman of the Index Committee at S&P
Dow Jones Indices.
"The Southwest continues to lead the housing recovery. Las Vegas
home prices are up 27.5 percent year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8, 20.8, and 20.4 percent respectively. However, all remain far below their peak levels.
"Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined.
More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase
may have peaked.
Prices nationally have returned to the levels last seen in the spring of
2004. Measured from the peak prices
reached in the summer of 2006 the two composites are down approximately 21 to
22 percent and they have recovered from the troughs of March 2012 by 20.5
percent for the 10-City and 21.2 percent for the 20 City.
the greatest positive change from June to July at 3.2 percent, followed by Las
Vegas at 2.8 percent. In both cases
their increase was identical to the gain from May to June. Detroit had a
monthly increase of 2.7 percent, slipping from the 3.1 percent improvement the
previous month. Seattle, Tampa and Washington were the only three MSAs where returns increased
from June to July. Cleveland showed the most weakness
with a +0.5 percent return in July versus +2.0
percent in June.
Looking at the annual rates of change, thirteen cities showed acceleration with San Francisco posting its highest year-over-year return of 24.8
percent since March
2001. Atlanta, Boston, Charlotte, Detroit, Miami, Minneapolis and Phoenix were the seven MSAs with lower annual growth rates;
the Twin Cities decreased the most with +9.5
percent in July compared
to +11.5 percent in June. Although
Detroit posted its 25th
consecutive positive year-over-year return, it remains the only city below its January 2000 level.
The FHFA index had an annual increase of 8.8 percent with all nine
census divisions posting positive year over year numbers ranging from 20.8
percent in the Pacific region (Hawaii, Alaska, Washington, Oregon, California)
to 3.8 percent in the East South Central (Kentucky, Tennessee, Mississippi,
The monthly improvement in the national FHFA number was not reflected
in all divisions. Price deprecation was
reported in the East South Central division which was down 0.7 percent in July
after increasing 1.3 percent from May to June.
The West South Central Division (Oklahoma, Arkansas, Texas, Louisiana) also
reversed directions, falling from a gain of 0.4 percent in June to an identical
loss in July.
The S&P/Case-Shiller Home Price Indices combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data and each index has a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January
2000 for a typical
home located within the subject market.
The FHFA HPI is based on home sales price information from repeat
mortgages sold to or guaranteed by Freddie Mac or Fannie May.