The seasonally adjusted FHFA house price index for November is down 0.1 percent month-over-month after no change to the flat reading in October. On a monthly basis the index has been trending lower since July, albeit unevenly. Prices for home resales and refinancing are broadly decelerating as the housing market reacts to rising mortgage rates and lessened home affordability.

The FHFA index is up 8.2 percent year-over-year, and falling for the ninth month in a row. This is the slowest pace of annual increase since up 7.8 in July 2020. While home prices are still on the rise compared to a year ago, the present pace is more in line with pre-pandemic readings and suggests that the big gains are in the past.

The unadjusted FHFA house price index is down 0.6 percent month-over-month and is down for the fifth straight month. It is down 8.1 percent year-over-year, and well below the recent peak of up 19.3 percent in February when the housing market was brisk in advance of anticipated increases in mortgage rates.

The FHFA indexes lag other housing price data by a month or two. Other, fresher data points to ongoing moderation in home prices. However, with supplies limited and mortgage rates declining a bit in December and January, home buying may be more active than previously thought and keep prices from declining as much as they might had mortgage rates remained near the peaks in October and November.

The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing, using data provided by Fannie Mae and Freddie Mac. The House Price Index is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. In contrast to other house price indexes, the sample is limited by the ceiling amount for conforming loans purchased by these government-sponsored enterprises (GSE). Mortgages insured by the FHA, VA, or other federal entities are excluded because they are not"conventional" loans. The FHFA House Price Index is a repeat transactions measure. It compares prices or appraised values for similar houses.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can dampen housing starts. Changes in home values, and the ability to draw upon expanding lines of home equity loans, play key roles in consumer spending and in consumer financial health.

Beginning with the onset of the subprime credit crunch in mid-2007 and with it a downturn in home prices, the ability of borrowers to refinance their debt into affordable fixed rate mortgages was sharply constrained. This in turn limited aggregate consumer spending and contributed to the depth of the Great Recession. From its peak in 2007 to its nadir in 2011, FHFA's house price index fell nearly 30 percent. The subsequent recovery proved slow but steady with the index finally surpassing its prior highs in 2016.