While Showing Signs of Deceleration, Home Prices Are Slowly Increasing.
U.S. house prices rose 1.2 percent in the second quarter of 2016 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 5.6 percent from the second quarter of 2015 to the second quarter of 2016. FHFA’s seasonally adjusted monthly index for June was up 0.2 percent from May. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
“Although the appreciation rate for the second quarter was of similar magnitude to what we’ve been seeing for several years now, a close look at the month-over-month price changes during the quarter reveals a potentially significant market shift,” says FHFA Supervisory Economist Andrew Leventis. “Our monthly price index indicates that in each of the three months of the quarter, the increase was only 0.2 percent. This is a much more modest pace of appreciation than we’ve seen in some time and most likely reflects accumulated pressures from significantly reduced home affordability.”
While the HPI rose 5.6 percent from the second quarter of 2015 to the second quarter of 2016, prices of other goods and services were nearly unchanged. The inflation-adjusted price of homes rose approximately 5.7 percent over the last year.
Home prices rose in every state except Vermont between the second quarter of 2015 and the second quarter of 2016. The top five states in annual appreciation were: 1) Oregon 11.7 percent; 2) Washington 10.3 percent; 3) Colorado 10.2 percent; 4) Florida 10.0 percent; and 5) Nevada 9.6 percent.
For more information, visit www.fhfa.gov/hpi.
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