As the job market continues to improve and buyers move in on a limited supply of homes, home prices increased in July, the Federal Housing Finance Agency reported Tuesday.
According to the FHFA’s monthly House Price Index (HPI), house prices climbed 0.6 percent in July, but the previously reported 0.2 percent change in June remains the same.
Year-over-year, from July 2014 to July 2015, home prices increased 5.8 percent, the FHFA found. The index is 1.1 percent below the peak reached in March 2007 peak and is about the same as the November 2006 index level.
For the nine census divisions, seasonally adjusted monthly price changes from June 2015 to July 2015 ranged from -1.2 percent in the New England division to +1.6 percent in the Mountain division.The 12-month changes were all positive FHFA reported, ranging from +2.1 percent in the New England division to +9.4 percent in the Mountain division.
The FHFA HPI is determined using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
Earlier this month, CoreLogic reported that low mortgage rates and stronger consumer confidence are driving home sales and home prices upward, according to the company's July 2015 Home Price Index (HPI) Report.
The report found that home prices, including distressed sales, rose 6.9 percent year-over-year in July. Home prices rose 6.7 percent excluding distressed sales.
"Home sales continued their brisk rebound in July and home prices reflected that, up 6.9 percent from a year ago," said Dr. Frank Nothaft, chief economist at CoreLogic. "Over the same period, the National Association of Realtors reported existing sales up 10 percent and the Census Bureau reported new home sales up 26 percent in July."
"Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late," said Anand Nallathambi, president and CEO of CoreLogic. "Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever-risings rental costs."
Fannie Mae reported in August that as gas prices continue to decline, oil-producing states remain at high-risk for home price decreases, according to the GSE's recent edition of Housing Insights.
Oil price declines within the past two months show no signs of a fast rebound, and the idea of a protracted bust prompts comparisons to the oil price slump of the 1980s, the report says.
"While most Americans enjoyed lower gas prices at the time, others felt a negative impact as large employment losses occurred in the oil industry followed by a general economic slowdown in many oil-producing states," Fannie Mae said. "This often led to house price declines. Prices in Texas, for example, fell 11 percent from 1983-1988 during a time when national home prices rose by 32 percent."