Washington, D.C., USA: U.S. house prices rose in July, up 0.2 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.2 percent increase in June was revised upward to 0.3 percent.
The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From July 2017 to July 2018, house prices were up 6.4 percent.
For the nine census divisions, seasonally adjusted monthly price changes from June 2018 to July 2018 ranged from -0.5 percent in the East South Central division to +1.1 percent in the South Atlantic division. The 12-month changes were all positive, ranging from +4.7 percent in the New England division to +8.7 percent in the Mountain division.
Why Markets Care About FHFA House Price Index (HPI)
The FHFA House Price Index (HPI) is a broad measure of the movement of single-family house prices. It measures change in the purchase price of homes with mortgages backed by Fannie Mae and Freddie Mac.
The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.
The HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.
The HPI includes house price figures for the nine Census Bureau divisions, for the 50 states and the District of Columbia, and for Metropolitan Statistical Areas (MSAs) and Divisions.
FHFA House Price Index (HPI) is a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity. The usual effect s that ‘Actual’ greater than ‘Forecast’ is good for the dollar and vice versa.
Other Economy News : US Home Price Gains Slow According to S&P Corelogic Case-Shiller Index
S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for July 2018 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: housingviews.com.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a6.0% annual gain in July, down from 6.2% in the previous month. The 10-City Composite annual increase came in at 5.5%, down from 6.0% in the previous month. The 20-City Composite posted a 5.9% year-over-year gain, down from 6.4% in the previous month.
Las Vegas, Seattle and San Francisco continued to report the highest year-over-year gains among the 20 cities. In July, Las Vegas led the way with a 13.7% year-over-year price increase, followed by Seattle with a 12.1% increase and San Francisco with a 10.8% increase. Five of the 20 cities reported greater price increases in the year ending July 2018 versus the year ending June 2018.