United States home prices were up 5.1 percent from January 2014 to January 2015, according to the Federal Housing Finance Agency monthly House Price Index (HPI), released today. The U.S. index is 3.4 percent below its March 2007 peak and is roughly the same as the December 2005 index level.
"The January-to-January price increase of 5.1 percent is quite strong, particularly given the relatively modest rate of overall inflation in the economy,” FHFA Principal Economist Andrew Leventis said. “The inflation-adjusted rate of home price appreciation is above the historical norm and has been supported by low interest rates and very low inventory levels. Slow-but-steady improvements in labor markets are also contributing to the momentum in prices.”
In January, U.S. house prices rose a mere 0.3 percent on a seasonally adjusted basis from the previous month. The previously reported 0.8 percent change in December was revised downward to a 0.7 percent change. The FHFA HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.
For the nine census divisions, seasonally adjusted monthly price changes from December 2014 to January 2015 ranged from 0.4 percent decrease in the Middle Atlantic and South Atlantic divisions to a 2.3 percent increase in the East South Central division. The 12-month changes were all positive for all regions. The Pacific region had the highest increase with an 8.2 percent increase, while the Middle Atlantic region had the smallest increase at 1.7 percent. The Mountain, West South Central, and East South Central regions had higher increases, while the West North Central, New England, and South Atlantic regions had smaller increases.