| Actual | Previous | Revised | |
|---|---|---|---|
| Month over Month | 0.2% | 0.4% | 0.5% |
| Year over Year | 4.8% | 4.7% | 4.8% |
Highlights
The FHFA house price index is up 0.2 percent on a seasonally adjusted basis in January from December after a small upward revision to up 0.5 percent in December from November. This is the lowest month-over-month increase since up 0.1 percent in June 2024. The index maintained the year-over-year pace of increases at up 4.8 percent in January from January 2024, the same as in December.
Upward price pressures for home resales and refinancing are a bit higher in December and January after a more moderate pace in the months of August 2024 to November 2024. With increasing supply on the market, sales of existing homes are a little more competitive. Buyers have more power to negotiate on price. Refinancing of existing mortgages are happening on units whose price tags have gone up since the original purchase.
The unadjusted FHFA house price index is down 0.1 percent in January from December after declining 0.3 percent in December from November. Compared to a year ago, prices are up 4.8 percent. There is a hint here that winter home resales and refinancing is a little more active than usual.
Upward price pressures for home resales and refinancing are a bit higher in December and January after a more moderate pace in the months of August 2024 to November 2024. With increasing supply on the market, sales of existing homes are a little more competitive. Buyers have more power to negotiate on price. Refinancing of existing mortgages are happening on units whose price tags have gone up since the original purchase.
The unadjusted FHFA house price index is down 0.1 percent in January from December after declining 0.3 percent in December from November. Compared to a year ago, prices are up 4.8 percent. There is a hint here that winter home resales and refinancing is a little more active than usual.
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.
