In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the FHFA home price index.
- FHFA data today show that prices were up 7.3 percent from a year ago in May. For the same period, NAR reported that prices rose 12.7 percent and CoreLogic reported a 12.2 rise in home prices. Case Shiller data covering a similar period of time will be available a week from today.
- Looking closely at the May data, we see that the biggest gains from a year ago were in the Pacific (Hawaii, Alaska, Washington, Oregon, and California) and Mountain (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico) divisions. NAR data also showed the largest gains in home prices occurred in the West. From one year ago the smallest gains were in the East South Central (Kentucky, Tennessee, Mississippi, and Alabama) and Middle Atlantic divisions (New York, New Jersey, and Pennsylvania).
- From one month ago, the biggest gains were in the South Atlantic (Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida) where prices advanced by 1.8 percent. The East South Central division showed weakness from April to May as prices slipped 1.5 percent.
- In yesterday’s EHS release, NAR data showed a continuing trend of double-digit price gains from one year ago. From June 2012 to June 2013, prices rose 13.5 percent according to the latest data. Because NAR reports data on the median price of homes sold in a period, it is able to release data more quickly than other groups that employ a repeat-sales index process. While the NAR median price picks up fluctuations in house prices as well as the mix of homes sold in any given period, history shows that it is a reliable early indicator of future price changes.
- Based on the FHFA data, the market price peak occurred in April 2007, and the current index is 11.2 percent below that peak, roughly in line with its January 2005 level.