U.S. House Prices Rose 1.1 Percent in Third Quarter 2012


Washington, DC – November 29, 2012 – (RealEstateRama) — U.S. house prices rose 1.1 percent from the second quarter to the third quarter of 2012 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages. Seasonally adjusted house prices rose 4.0 percent from the third quarter of 2011 to the third quarter of 2012. FHFA’s seasonally adjusted monthly index for September was up 0.2 percent from August.

“With significant growth in home prices during the quarter and a modest inventory of homes available for sale, house price movements in the third quarter were similar to what we observed in the spring,” said FHFA Principal Economist Andrew Leventis. “The past year has seen consistent price increases, but a number of factors continue to affect the recovery in home prices such as stagnant income growth, high unemployment levels, lingering uncertainty about the macroeconomy, and the large number of homes in the foreclosure pipeline.” FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transactions information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 1.0 percent over the latest quarter. Over the latest four quarters, the index is up 3.3 percent. For individual states, price changes reflected in the expanded-data measure and the traditional purchase-only HPI are compared on pages 21-23 of this report.

While the national, purchase-only house price index rose 4.0 percent from the third quarter of 2011 to the third quarter of 2012, prices of other goods and services rose 1.5 percent over the same period. Accordingly, the inflation-adjusted price of homes rose approximately 2.5 percent over the latest year.

Significant Findings:

? The seasonally adjusted purchase-only HPI rose in the third quarter in 39 states and the District of Columbia.

? Of the nine census divisions, the Mountain division experienced the strongest increase in the latest quarter, posting a 3.0 percent price increase. House prices were weakest in the East South Central division, where prices fell 0.2 percent over the quarter. ? As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., third quarter price increases were greatest in the Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area (MSA). That area saw prices increase by 7.2 percent between the second and third quarters. Prices were weakest in the Edison-New Brunswick, NJ metropolitan division, where prices fell 2.2 percent over that period.

? The monthly seasonally adjusted purchase-only index for the United States has increased for 8 consecutive months. ? FHFA’s new “distress-free sales” house price index suggests that price gains in the latest quarter may be partially attributable to decreases in the share of distressed sales in the latest quarter. For 11 of the 12 metropolitan areas covered by the new set of indexes, the distress-free measures—which remove the effect of distressed sales—showed more modest price gains than were evident in the traditional purchase-only indexes.

The complete list of state appreciation rates is on pages 18-19. The list of metropolitan area appreciation rates computed in a purchase-only series is on page 33. Appreciation rates for the all-transactions metropolitan area indexes are on pages 37-50. Highlights

This quarter’s Highlights article discusses increased data coverage for FHFA’s expanded-data house price indexes. With this publication, expanded-data indexes are released for the 25 largest metropolitan areas in the country. Previously, expanded-data indexes were made available for states, but not smaller levels of geographic aggregation. The article compares recent price trends for the expanded-data metrics against those reflected in FHFA’s standard purchase-only indexes. Background FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings on the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 46 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 37 years. This HPI report contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by census division and for the U.S. as a whole; 3) A ranking of 304 MSAs and metropolitan divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked. ? The next quarterly HPI report, which will include data for the fourth quarter of 2012, will be released Feb. 26, 2013.

? The next monthly index, which will include data through October 2012, will be released Dec. 20, 2012.

? Beginning in January 2013, the FHFA House Price Index will be released at 9 a.m. EST.

? HPI release dates for 2013 are available here.


The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

Corinne Russell (202) 649-3032
Stefanie Johnson (202) 649-3030

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