FHFA: Home Values Rise 1.8%, Largest Uptick Since ’05

Home prices rose 1.8% in the second quarter compared with the previous quarter and were up 3% year-over-year accounting for seasonal adjustments, according to data released Thursday by the Federal Housing Finance Agency. The increase marks the largest quarterly price increase since the fourth quarter of 2005, the FHFA reported. 

The house price index (HPI) data follows reports from several housing indicators that have suggested a bottoming out of home prices in recent months.  

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“Although some housing markets are still facing significant challenges, house prices were quite strong in most areas in the second quarter,” said FHFA Principal Economist Andrew Leventis. “The strong appreciation may partially reflect fewer homes sold in distress, but declining mortgage rates and a modest supply of homes available for sale likely account for most of the price increase.”

FHFA examined regional data, finding the seasonally adjusted purchase-only HPI rose in 43 states in the second quarter. 

View the data in depth

 Written by Elizabeth Ecker

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  • Let’s see Andrew works for FHFA which is part of the Obama Administration.  Hmmm, could the positive interpretation be in fact little more than spin?  Looking at the red line, last time the rise was this steep, the increase teetered and then fell back down, just not as far as in the previous drop.

    In 10 days we will reach Labor Day, the normal end of the summer home selling season.  Shadow inventory is still high, defaults are still at relative highs and those waiting for home prices to turn around before selling are still waiting (pent up inventory).  So is 1.8% an exciting number???

    I am not so sure that home prices have bottomed.  While that could occur late this winter, it is hard to believe that home prices will be significantly higher when the spring home selling season begins.  Chances are those prices will be somewhat lower.  As to home appreciation, this summer was as generally expected, blah.

    With the Presidential and Congressional elections up in the air this fall, it is too early to say how home appreciation will track next year.  Without real reductions to unemployment and underemployment, the real push in home buying activity (first time buyers) has a long way to go before we will see any real change to home values.

    The Zillow Chief Economist just announced that they expect home values to go up 1.2% nationally but warn the picture is much different locally.  For example, most of Florida and Arizona are looking better but Chicago and Atlanta are still having difficultly.

    If home appreciation has ANYTHING to do with HECM application volume, 2013 looks like more of the same, continued decline.

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