What is probably your biggest investment is worth a little more these days
The Federal Housing Finance Agency (FHFA) reports house prices rose 1.4 percent from the third quarter to the fourth quarter of 2012. The agency's seasonally adjusted purchase-only house price index HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages.
Seasonally adjusted house prices rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012 and the seasonally adjusted monthly index for December was up 0.6 percent from November.
A strong quarter
“The fourth quarter was another strong one for house prices, as it was the third consecutive quarter where U.S. price growth exceeded one percent,” said FHFA Principal Economist Andrew Leventis. “While a significant number of homes remained in the foreclosure pipeline, the actual number of homes available for sale was very low and fell over the course of the quarter.”
While the national, purchase-only house price index rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012, prices of other goods and services rose 1.7 percent over the same period. Accordingly, the inflation-adjusted price of homes rose approximately 3.7 percent over the latest year.
The FHFA report also found:
- The seasonally adjusted purchase-only HPI rose in the fourth quarter in 38 states and the District of Columbia.
- Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent price increase. House prices were weakest in the East North Central division, where prices remained unchanged from the prior quarter.
- As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., fourth quarter price increases were greatest in the Phoenix-Mesa-Glendale, AZ, Metropolitan Statistical Area (MSA). That area saw prices increase by 6.8 percent between the third and fourth quarters. Prices were weakest in the Edison-New Brunswick, NJ, metropolitan division, where they fell 0.8 percent over that period.
- The monthly seasonally adjusted purchase-only index for the U.S. has increased for 11 consecutive months.
- FHFA’s new “distress-free” house price index suggests that price gains in the latest quarter may be partially attributed to decreases in the share of distressed sales in the latest quarter. For 9 of the 12 metropolitan areas covered by the new set of indexes, the distress-free measures -- which remove the direct effect of short sales and sales of bank-owned properties -- showed more modest price gains than were evident in the traditional purchase-only indexes.