Top 5 States for Annual Home Price Appreciation

Home prices are up across the board—over the month, over the quarter, and over the year, according to the most recent House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA) this morning.

During the second quarter of the year, home prices increased 1.6 percent over Q1 and 6.6 percent over Q2 2016. From May to June, prices rose 0.1 percent, the FHFA reported.

According to William Doerner, Senior Economist at the FHFA, it’s tight inventory and low new home sales that are to blame.

“New home sales are climbing but, relative to the overall population, they still remain low from a historical perspective,” Doerner said. “The tight inventory is a major explanation for why house prices have been increasing every quarter over the last six years.”

Home prices also rose in “nearly every state” during the second quarter of 2017, Doerner said. The top five states for annual appreciation were Washington (up 12.4 percent), Colorado (up 10.4 percent), Idaho (up 10.3 percent), Florida (9.4 percent), and Utah (up 9.2 percent). Appreciation was weakest in Wyoming (up just 0.94 percent), while Alaska and West Virginia actually experienced price drops of 0.33 percent and 1.22 percent, respectively.

Prices were also up across all nine U.S. Census divisions. The Pacific region, which includes Alaska, California, Hawaii, Oregon, and Washington, experienced the most growth, with a 2.6 percent jump over the quarter and an 8.9 percent rise over the year. Prices appreciated the least in the Middle Atlantic (New Jersey, New York, Pennsylvania), rising just 0.8 percent from Q1.

At the metro level, the Seattle-Bellevue-Everett, Washington, area experienced the steepest incline, with prices jumping an annual 15.7 percent. Appreciation was lowest in New-Haven-Milford, Connecticut, where prices rose 0.1 percent over the year.

The FHFA releases its House Price Index on a monthly basis. The next one will be released September 21. To view today’s full report, visit FHFA.gov.