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FHFA Reports Continued Price Gains in Q4

Home prices rose 5.5 percent year-over-year in 2012's final quarter, the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) reported Tuesday.

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FHFA's seasonally adjusted purchase-only ""Home Price Index"":http://www.fhfa.gov/webfiles/25010/2012Q4HPI.pdf (HPI) increased 1.4 percent on a quarter-to-quarter basis in Q4. Month-over-month, December's index was 0.6 percent up from November, marking the 11th straight month of increases.

""The fourth quarter was another strong one for house prices, as it was the third consecutive quarter where U.S. price growth exceeded one percent,"" said FHFA principal economist Andrew Leventis. ""While a significant number of homes remained in the foreclosure pipeline, the actual number of homes available for sale was very low and fell over the course of the quarter.""

FHFA's new ""distress-free"" HPI suggests price gains in Q4 may be partially attributed to declines in the share of distressed sales. For nine of the 12 metropolitan areas covered by the new set of indices, the distress-free measures--which remove the direct effect of short sales and sales of bank-owned properties--showed more modest price gains than were evident in the traditional purchase-only indexes.

The index rose in Q4 in 38 states and the District of Columbia, FHFA said.

While the national purchase-only HPI rose 5.5 percent from Q4 2011 to Q4 2012, FHFA notes prices of other goods and services rose 1.7 percent over the same period. Accordingly, the inflation-adjusted price of homes rose approximately 3.7 percent in 2012.

The agency also released figures for its expanded-data HPI, a metric introduced in August 2011 that adds transaction information from county recorder offices and the Federal Housing Administration (FHA) to the HPI data sample. According to the expanded-data HPI, prices rose 1.6 percent quarter-over-quarter; the yearly increase in Q4 matched the normal HPI increase at 5.5 percent.

Of the nine census divisions, the Pacific region experienced the strongest increase in the fourth quarter, posting a 4.2 percent price increase from the prior quarter. Prices were weakest in the East North Central division, which showed negligible movement one way or the other.

Fourth-quarter price gains were greatest in the Phoenix-Mesa-Glendale area of Arizona, which saw a 6.8 percent increase from quarter to quarter. At the other end of the spectrum, New Jersey's Edison-New Brunswick metro posted a 0.8 percent decrease over the same period.

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