Most forecasts at the end of 2016 called for a gradual slowdown in the pace of home price appreciation. Depending upon whom you asked, growth was supposed to slow to an annual pace in the 4% range. Not only are we nowhere close to those predictions, home price appreciation actually continues to accelerate! The Federal Housing Finance Agency (FHFA) said its House Price Index (HPI) was up 0.7 percent in August and the July change, originally reported as an 0.2 percent gain, was revised to 0.4 percent.
The month-over-month change was higher than anticipated. Analysts polled by Econoday had forecast and 0.4 percent change, with a range of 0.1 to 0.5 percent.
On an annual basis prices rose 6.6 percent compared to the July 2016 to July 2017 gain of 6.3 percent. Over the first eight months of 2017, annual price increases have averaged 6.4 percent.
Among the nine census divisions the Pacific had the largest August increase, up 1.4 percent. It was the largest increase in that region since March, and follows a decline of 0.5 percent in July. The only division that posted a loss was New England, where prices were down 0.1 percent. The Pacific division also had the largest annual rate of appreciation, 9.3 percent. The smallest year-over-year gain was in the Middle Atlantic at 5.0 percent.
The FHFA HPI is based on home sales information from purchase mortgages sold to or guaranteed by the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The HPI was indexed to 100 in January 1991. The August index was at 251.8, up from 249.8 in July.