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Home prices rise for 10th consecutive quarter says FHFA

Home prices continue up in fourth quarter
Home prices continue up in fourth quarter
FHFA website

U.S. home prices rose 1.2 percent for the fourth quarter of 2013 making 10 consecutive quarters that US Home prices went up. This was according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI) released today. This index is based on purchase-only home prices on a seasonally adjusted index.

Home price appreciation in the fourth quarter was considerable, but more modest than in
recent periods,” said FHFA Principal Economist Andrew Leventis. “It is too early to know
whether the lower quarterly growth rate represents the beginning of more normalized price
appreciation patterns or a more significant slowdown.

The home price index is calculated using home sales information from mortgages sold to or guaranteed by Fannie Mae or Freddie Mac. Compared to last year, house prices rose 7.7% from the fourth quarter of 2012 to the fourth quarter of 2013. FHFA’s seasonally adjusted monthly index for December was up 0.8% from the previous month.

FHFA also uses an expanded-data house price index, a metric that adds transaction information from the county recorder offices and the Federal Housing Administration (FHA) to the HPI data giving a 1.2% increase over the prior quarter. During 2013 that index is up 7.8%. Washington state was slightly below the national average showing an increase of 6.78% over the year and a decrease of zero point to for 4% for the quarter. Nevada continue to lead the states in increase in values with a 24.32% increase over the last year but that only brought them up to 62.88% since 1991. Washington state is up 139.68% since 1991.

A breakdown in state-by-state increase or decrease can be seen in the accompanying charts. An interesting visual also shows those states that are showing the largest gain month over month in a dark blue while Washington state is a light blue still showing a 5.5 to 7.3% gain.

The house price index is a broad measure of the movement of single-family house prices based on sales during the months or quarters measured. The HPI is a measure designed to capture changes in the value of single-family houses in the U.S. as a whole and various regions and states.

Unfortunately for many first-time homebuyers the increase in home prices is not good news as the increase in home prices is outpacing the increase in income. According to the Bureau of Labor Statistics real average income is up only 0.2% from January 2013 to January 2014.

About the author: Fred Chamberlin was a senior loan officer with Guild Mortgage Company in Oak Harbor. He was in the mortgage origination business for over 20 years and in the lending business for over 30 and authors a number of mortgage related blogs.

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