The Federal Housing Finance Agency (FHFA) reported today on its House Price Index (HPI) for March, based on the purchase prices of houses involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. The FHFA index of national home prices is more comprehensive than the 10 and 20 major metro-areas that determine the two Case-Shiller indexes, and includes both small cities and major cities like Houston (not one of the 20 metro areas in Case-Shiller). Like the Case-Shiller indices, the HPI is a repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same single-family properties. Here are some highlights of today’s FHFA house price report:
1. March home prices increased by 1.3% on a seasonally adjusted basis compared to February, posting the fourteenth back-to-back monthly increase in home prices starting in February. The last time there was a streak of 14 consecutive monthly increases in the HPI was back in early 2006, seven years ago. The March HPI at 199.1 was the highest level for home prices since February 2009, more than three years ago (see chart).
2. The March HPI (seasonally adjusted) was 7.3% above its year-ago level following a 7.1% year-over-year increase in February and a 6.5% gain in January. The year-over-year increase in the March HPI was the fourteenth consecutive monthly increase in the HPI from its year ago level. The last time that occurred was more than six years ago in the 14 months from June 2006 to July 2007. It was also the largest annual gain in home prices since May 2006, nearly seven years ago.
MP: The consistent, ongoing increases that started last year in national house prices on a repeat-sales basis as reported by the FHFA provide more evidence that the U.S. housing market has moved past the 2011 house price bottom (see chart) and has entered into a new cycle of recovery and rising home prices that started in 2012 and continues in 2013.