FHFA: Home prices still on the rise
But growth could see moderation in 2018
Home prices are still on the rise, increasing once again in February, according to the latest monthly House Price Index from the Federal Housing Finance Agency.
Home prices increased 0.6% from January, the report showed. This is a slight slowdown from the 0.8% increase in January, which was revised upward to 0.9%. Annually, home prices increased 7.2% from February 2017.
The chart below shows home prices continue to increase each month, but March came down slightly from January’s nearly one-year high.
The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. Because of this, the selection excludes high-end homes bought with jumbo loans or cash sales.
However, one expert explained home prices could begin to moderate in 2018.
“Annual house price growth on both the Case-Shiller and FHFA measures has been fairly stable since the start of the year,” Capital Economics Property Economist Matthew Pointon said. “After dropping for the first time in 18-months in January, growth on the national Case-Shiller index returned to 6.3% in February.”
“A rise in debt-to-income ratios looks to have supported house price gains over the past few months but, with mortgage interest rates now on the rise, we still expect a slight moderation in growth this year,” Pointon said.
Monthly, across the nine census divisions, home price changes from January to February ranged from an increase of 0.1% in the West North Central division to an increase of 1.6% in the East South Central division.
Annually, the home price changes ranged from a low of a 4.8% increase in the Middle Atlantic division to an increase of 10.3% in the Pacific division.
Here are the states in each of the divisions:
West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri
East South Central: Kentucky, Tennessee, Mississippi and Alabama
Middle Atlantic: New York, New Jersey and Pennsylvania
Pacific: Hawaii, Alaska, Washington, Oregon and California
Source: Housing Wire