FHFA Reports Monthly Increase in Home Pricesby Tim Manni
The Federal Housing Finance Agency (FHFA) reported a 0.9% increase in home prices from April to May. The seasonally-adjusted increase comes after a revised 0.3% decline from the month prior, yet is the third increase of the year so far. According the FHFA’s index, home prices are still down 5.6% on a yearly basis. Home prices remain 10.7% below their peak from April 2007.
“Revisions and volatility of the monthly index make it hard to draw any conclusions, but the seasonally-adjusted HPI for the first five months of this year is up 0.3 percent, or 0.7 percent on an annualized basis,” said FHFA Director James Lockhart.
Since the FHFA regulates Fannie Mae and Freddie Mac, their index only reports the prices of homes with loans in the conforming market. Overall, home prices are showing general signs of firming, even amongst other indicies that measure home prices in a different manner. While increases haven’t been as strong in the Case-Shiller home price index, prices have at least shown that they’re falling more slowly.
As Mr. Lockhart said, it’s hard to draw significant conclusions from this data, but we can say it appears that home prices are beginning to firm somewhat. Consecutive monthly readings of rising home prices would be an exceptional sign for the market.
See also: “Home Prices: The Statistic That Matters Most?”
In other real estate news, the National Association of Realtors has reported that existing home sales have risen by 3.6% in June, the third straight monthly increase.
While the realtors reported that prices remain about 15% below last year, their report showed back-to-back increases in the median sales price of 1.9% and 0.5%, respectively. If both demand and prices are rising, we could see an earlier end to the recession and perhaps a faster recovery, too.