FHFA: Housing Price Index Drops in January

The Federal Housing Finance Agency's (FHFA) Housing PricernIndex (HPI) fell in January by 0.6 percent from December figures according tornthe monthly report issued by FHFA yesterday. rnIn addition, the December figure was revised downward to reflect a 2.0rnpercent decline in home prices rather than the 1.6 percent previously reported.

The HPI is calculated using the purchase prices of housesrnfor which Freddie Mac or Fannie Mae guarantee mortgages.  The index is set at 100 based on housingrnprices in January 1991, and all prices reported here are seasonally adjusted.

In January 2010, the national index stood at 194.0 comparedrnwith 195.1 in December.  Across the ninerncensus regions the January index ranges from a low of 170.3 in the East NorthrnCentral Region (MI, WI, IL, IN, OH) to 230.9 in the Mountain Region (MT, ID,rnWY, NV, UT, CO, AZ, NM) and the degree of change in January ranged from -1.8rnpercent in the East North Central to a 2.0 percent increase in the Mountainrnregion.

The index has lost 3.3 percent since January of 2009 when itrnwas 200.7.  The year-over-year change wasrnexperienced most strongly in the South Atlantic Region (DE, MD, DC VA, WV, NC,rnSC, GA, and FL) where the index is down 7.5 percent and the Mountain Regionrnwhere it has fallen 7.0 percent.  ThernEast North Central region was down 6.9 percent. rnOnly the Pacific and the West South Central (TX, OK, AR, and LA) Regionsrnimproved year-over-year, improving 1.6 percent and 1.0 percent respectively.  During the January 2008-January 2009 periodrnthe national index was down 6.7 percent.

Since reaching its peak of 218 in April 0f 2007, the HPI hasrndeclined 13.2 percent and is now at levels last seen in October 2004.  It is worth noting, however, that the precipitousrndownturn in housing prices since early 2007 has really only normalized thernmarket, offsetting the rapid increases experienced since the turn of the century.rn The Compound Annual Growth Rate sincernJanuary, 2000 to the present is now identical to the rate from January 1991 tornthe present, 3.5 percent.

The estimated December data was revised downward in six ofrnthe nine regions as well as nationally.

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