The FHFA show U.S. house price appreciation in July rising 1.0 percent on a seasonally adjusted basis from June. This is the 18th straight month of increase in the purchase-only index. The 0.7 percent increase for June was not changed. The Case-Shiller index are for 10- and 20-City Composites. These indices show month over month increases of 1.9 and 1.8 percent, respectively.
The FHFA monthly House Price Index (HPI) is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac. Compared to a year ago, house prices are up 8.8 percent but 9.6 percent below the April 2007 peak. It is nearly the same as the March 2005 index level.
The FHFA HPI has nine divisions and shows a low in the East South Central division at –0.7 percent to a high of +2.2 percent in the Pacific division. Year over year show positive gains across the board with a 20.8 percent increase in the Pacific division.
Case-Shiller HPI measures home prices in both a 10 city and 20 city matrix. The 12 month change for the 20-City Composite is up +12.4 percent while the 10-City Composite is up +12.3 percent. 13 of the 20 cities posted positive increases in July with Las Vegas hitting the highest marks at +27.9 percent in July after posting +24.9 percent 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%
year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8%, 20.8% and
20.4% respectively. However, all remain far below their peak levels.
He continued to explain that although all 20 cities are up month to month, the monthly rate of price gains has declined. It appears that with more cities experiencing slow gains each month over the previous month, that the rate of increase may have peaked. Most news reports are suggesting that much of the price increase has been due to low inventory for homes for sale.
Additionally, mortgage applications have dropped, suggesting that rising interest rates are affecting housing, according to Blitzer. Last week’s announcements from the Fed that no change will be coming for bond buying, may have a limited, favorable impact on mortgage pricing.
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.