| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.4% | 0.3% to 0.5% | 0.7% | 0.6% | 0.5% |
| Year over Year | 3.1% | 3.6% | 3.7% |
Highlights
The FHFA house price index is up 0.7 percent in April from March and revised slightly higher to up 0.5 percent in March from February. The April increase is above the consensus of up 0.4 percent in the Econoday survey of forecasters. The index is up 3.1 percent compared to April 2022.
The month-over-month gain is the fourth month in a row for the index and reflects a firming in values for existing home sales and home refinancing. Home resales have been constrained by a lack of supply on the market and brisk competition for the more sought-after units. This has helped support prices despite mortgage rates remaining more elevated than the same time last year.
The year-over-year increase in the index is the slowest since up 3.0 percent in July 2012 and points to further cooling in the housing market even with some short-term price support.
The month-over-month gain is the fourth month in a row for the index and reflects a firming in values for existing home sales and home refinancing. Home resales have been constrained by a lack of supply on the market and brisk competition for the more sought-after units. This has helped support prices despite mortgage rates remaining more elevated than the same time last year.
The year-over-year increase in the index is the slowest since up 3.0 percent in July 2012 and points to further cooling in the housing market even with some short-term price support.
Market Consensus Before Announcement
The house price index, which has rebounded, has beaten Econoday's consensus substantially the last three reports in a row. After March's 0.6 percent gain, forecasters see the index climbing 0.4 percent in April.
Definition
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.
Description
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.
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.
