| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.2% | 0.2% to 0.3% | 0.7% | 0.3% | 0.4% |
| Year over Year | 4.4% | 4.2% | 4.2% |
Highlights
The seasonally adjusted FHFA house price index is up 0.7 percent in September after a small upward revision to up 0.4 percent in August. The September consensus in the Econoday survey of forecasts is for up 0.2 percent. Year-over-year the index is up 4.4 percent.
The dip in mortgage rates in September led to a more aggressive market for existing homes and a wave of refinancing of current mortgages. As a result, there was a brief escalation in home prices as consumers faced more competition in inking contracts while rates were lower. The pace of annual increases in home prices reached a plateau was up 4.4 p0ercent for both August and September and were the lowest since up 3.2 percent in June 2023.
The Freddie Mac rate for a 30-year fixed rate mortgage averaged around 6.4 percent in August, slipped to about 6.2 percent in September, and has since risen to 6.5 percent in October and 6.8 percent in November to date.
The unadjusted house price index is up 0.3 percent in September after down 0.3 percent in August. It is up 4.4 percent compared to September 2023
The dip in mortgage rates in September led to a more aggressive market for existing homes and a wave of refinancing of current mortgages. As a result, there was a brief escalation in home prices as consumers faced more competition in inking contracts while rates were lower. The pace of annual increases in home prices reached a plateau was up 4.4 p0ercent for both August and September and were the lowest since up 3.2 percent in June 2023.
The Freddie Mac rate for a 30-year fixed rate mortgage averaged around 6.4 percent in August, slipped to about 6.2 percent in September, and has since risen to 6.5 percent in October and 6.8 percent in November to date.
The unadjusted house price index is up 0.3 percent in September after down 0.3 percent in August. It is up 4.4 percent compared to September 2023
Market Consensus Before Announcement
Forecasts call for a modest 0.2 percent rise on the month after a 0.3 percent increase the month before.
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.
