The FHFA house price index for June shows ongoing moderation in values of existing homes purchased and refinanced. While it is typical of prices for existing homes to decline in the second half of the year, on a seasonally adjusted basis, the first half of 2025 shows that year-over-year price gains have fallen sharply since January. The cooling in the appreciation in home values could help home sales if it helps make buying more affordable. It may also encourage some homeowners to put their properties on the market if these are not viewed as assets with potential to further build equity quickly.

The seasonally adjusted FHFA house price index is down 0.2 percent in June from May. This is the third month in a row of dips in the index and the fourth month with no month-over-month gain. The year-over-year percent change is up 2.6 percent in June, half of the 5.2 percent annual gain seen in January. The June annual increase is the lowest since 1.9 percent in April 2012.

The unadjusted FHFA house price index is unchanged in June from May. The flat reading comes after five months if increases. The index is up 2.6 percent from June 2024, an increase which is the lowest since up 2.0 percent in April 2012.

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.