The FHFA house price index is up 1.2 percent in February after a dip of 0.1 percent in January. The February increase is well above the consensus of up 0.1 percent in the Econoday survey of forecasters. The larger than expected gain likely reflects a modest rush to buy an existing home or refinance at a time when it was clear that mortgage rates were once again on the rise and that prospects for lower rates were more remote. Competition for existing units kept prices higher than that might have been otherwise at what is normally a sleepy time of year in the housing market before the spring buying season.

The index is up 7.0 percent year-over-year in February, the largest annual rise since up 8.2 percent in November 2022. Homebuyers became much more sensitive to mortgage rates in the decision to purchase back in October 2022 when rates for a 30-year fixed rate mortgage crossed the 6.5 percent threshold. Dips below there have motivated some buyers to commit while rates are more favorable, while periods when rates are bumping up toward 7 percent or topping that have seen buyers decide to wait or exit the market entirely. Through all this, lean inventories of existing homes have meant that home prices have not fallen and that what buyers there are remain in competition for the most sought-after segments of the market. In recent months, it appears that homebuyers have accepted that if they want to buy a home, they will have to take out a mortgage at current rates on a unit that is market priced.

The house price index is expected to rise 0.1 percent on the month in February following a 0.1 percent decline in January.

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.