U.S. House Prices Rose 2.0 Percent in Third Quarter 2013


WASHINGTON, D.C. – November 26, 2013 – (RealEstateRama) — Upward momentum in U.S. house prices remained strong in the third quarter, as prices rose 2.0 percent from the previous quarter, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). This is the ninth consecutive quarterly price increase in the purchase-only, seasonally adjusted index and it marks the first time since 2009 that the national house price level is higher than it was five years ago.

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“Overall, the housing market experienced another strong quarter, but price appreciation in the latter part of the quarter was relatively subdued,” said FHFA Principal Economist Andrew Leventis. “Price increases in August and September of 0.4 and 0.3 percent, respectively, were notably below appreciation rates observed earlier this year and in late 2012.”

The HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. Compared with last year, house prices rose 8.4 percent from the third quarter of 2012 to the third quarter of 2013. FHFA’s seasonally adjusted monthly index for September was up 0.3 percent from August.

FHFA’s expanded-data house price index, a metric introduced in August 2011 that adds transaction information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 2.2 percent over the latest quarter. Over the last four quarters, that index is up 8.8 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.

The seasonally adjusted, purchase-only HPI rose 8.4 percent from the third quarter of 2012 to the third quarter of 2013 while prices of other goods and services rose only 1.2 percent. The inflation-adjusted price of homes rose approximately 7.2 percent over the latest year.

Significant Findings:

? The seasonally adjusted, purchase-only HPI rose in 48 states and in the District of Columbia during the third quarter. Top 5 in annual appreciation: 1) Nevada 2) California 3) Arizona 4) Florida and 5) Washington.

? Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent increase and a 19.2 percent increase since last year. House prices were weakest in the East South Central division, where prices increased 0.8 percent from the prior quarter.

? As measured with purchase-only indexes for the 100 most populated metropolitan areas in the U.S., third quarter price increases were greatest in the Stockton-Lodi, CA Metropolitan Statistical Area (MSA) where prices increased by 8.3 percent. Prices were weakest in the Virginia-Beach-Norfolk-Newport News, VA-NC MSA, where they fell 2.2 percent.

? Over the past year, only 1 MSA —Winston-Salem, NC — had a negative appreciation rate and 11 of the 20 MSAs with the highest appreciation rates were in California.

? The monthly seasonally adjusted purchase-only index for the U.S. has increased for the last 20 consecutive months.

FHFA’s “distress-free” house price indexes, which were published for 12 large metropolitan areas on page 37, generally report lower quarterly appreciation than FHFA’s traditional purchase-only indexes. In nine of the 12 areas covered, the new series—which removes short sales and sales of bank-owned properties—shows lower quarterly appreciation than the purchase-only series.

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 pages 34-36. Appreciation rates for the all-transactions metropolitan area indexes are on pages 40-52.

Technical Note

This quarter’s Technical Note follows up on the 2013Q2 release that introduced metropolitan area HPIs based on new definitions from the Office of Management and Budget. Feedback was received from a variety of users, companies, and other agencies that utilize HPI data but have not updated from the prior (2009) definitions to the new (2013) definitions. As an aid, HPIs using each definition have been posted on the Downloadable Data page under the “Utility files” subheading (at http://www.fhfa.gov/Default.aspx?Page=87).

The new definitions provide pricing information for a larger number of metropolitan areas.

Many places are repeated under both the 2009 and 2013 definitions. Comparing the two sets of delineations, we provide statistics about when HPIs differ between one-quarter, four-quarter, and five-year changes. The Technical Note includes two tables that show the average differences are close to zero and the range (from minimum to maximum) is low. In general, the results show HPI changes are very similar between 2009 or 2013 definitions.


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 50 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 38 years.


? The next quarterly HPI report, which will include data for the fourth quarter of 2013, will be released Feb. 25, 2014.

? The next monthly index (of data through October 2013) will be released Dec. 24, 2013.

? Release dates for 2013 and 2014 are at http://www.fhfa.gov/Default.aspx?Page=83.


The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
These government-sponsored enterprises provide more than $5.5 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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