Q4 Home Price Gains Outpace Inflation -FHFA

The Federal Housing Finance Agency (FHFA) said today thatrnhome prices in the fourth quarter of 2014 were up 1.4 percent compared to thernprevious quarter and 4.9 percent from the fourth quarter of 2013.  The fourth quarter was the fourteenthrnconsecutive one in which the agency’s purchase only House Price Index (HPI)rnincreased on a seasonally adjusted basis from the prior quarter.  </p

Thernmonthly HPI for December, also reported today, was up 0.8 percent fromrnNovember. This measure has increased for 23 ofrnthe last 24 months with the single decreased registered in November 2013</p

FHFA’s index is calculated using home sales pricerninformation from mortgages sold to or guaranteed by Fannie Mae and FreddiernMac.  An expanded data index usingrntransaction information from county recorders’ offices and the FHA was up 1.3rnpercent quarter-over-quarter and was 6.0 percent higher than in the fourthrnquarter of 2013.</p

“Contrary to prior indications of arnpossible slowdown, home price appreciation in the fourth quarter was relativelyrnstrong,” said FHFA Principal Economist Andrew Leventis.  “The key driversrnof appreciation over the last few years-low inventories of homes available forrnsale, and improvement in labor markets-likely played a role in driving uprnprices during the quarter.”</p

The 4.9 percent annual increase in homernprices from the fourth quarter of 2013 outpaced the increase in prices of otherrngoods and services significantly with the latter rising only 0.4 percent duringrnthe same period.  Thus therninflation-adjusted price of homes rose approximately 4.5 percent over thernlatest year.</p

Year-over-year the purchase-only HPIrnrose in 48 states and the District of Columbia.  The top five areas inrnannual appreciation were the District of Columbia, up 12.5 percent; Nevada withrna  9.0 percent increase, North Dakota which gained 8.4 percent followed byrnColorado (7.9 percent), and Michigan (7.8 percent.)</p

Among the 100 most populatedrnmetropolitan areas in the U.S., fourth quarter price increases were greatest inrnthe San Francisco-Redwood City-South San Francisco, CA area, where pricesrnincreased by 6.0 percent.  Prices were weakest in the El Paso, TX MSA,rnwhere they fell 6.6 percent.</p

Of the nine census divisions, thernMountain division experienced the strongest increase in the fourth quarter,rnposting a 1.8 percent quarterly increase and a 5.5 percent annual increase. Housernprice appreciation was weakest in the New England division, where prices fellrn.03 percent. </p

FHFA’s purchase-only index is based onrnmore than 7 million repeat sales transactions. It as well as FHFA’s all-transactionsrnindex are based on data obtained from Fannie Mae and Freddie Mac for mortgagesrnoriginated over the past 39 years.

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