MortgageReal Estate

FHFA: Home prices increase 6.6% in second quarter

Increased in nearly every state

Home prices increased in the second quarter, but moved only slightly from May to June, according to the House Price Index from the Federal Housing Finance Agency.

The HPI increased 1.7% from the first quarter to the second quarter of 2017, and increased 6.6% from the second quarter last year. However, the seasonally adjusted month index increased only 0.1% from May to June.

The chart below shows the continually increasing home prices which showed a slowdown over the past couple of months.

Click to Enlarge

FHFA HPI

(Source: FHFA)

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. Because of this, the selection excludes high-end homes bought with jumbo loans or cash sales.

“U.S. house prices rose in nearly every state during the second quarter,” FHFA Senior Economist William Doerner said. “New home sales are climbing but, relative to the overall population, they still remain low from a historical perspective. The tight inventory is a major explanation for why house prices have been increasing every quarter over the last six years.”

Home prices increased in 48 states and the District of Columbia from the second quarter of 2016 to the second quarter of 2017. The states that didn’t show an annual increase were Alaska with a decrease of 0.3% from last year and West Virginia which dropped 1.2%.

Regionally, the increased ranged from a quarterly increase of 2.6% and annual increase of 8.9% in the Pacific division to a quarterly increase of just 0.8% in the Middle Atlantic division.

Here is a list of which states are in each of those divisions:

Middle Atlantic: New York, New Jersey, Pennsylvania

Pacific: Hawaii, Alaska, Washington, Oregon, California

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