The real estate industry received two positive reports in the past week after a long dry streak. First it was reported that existing home sales were up in February, and today we found out that home prices actually increased in January. It has been a long time since anyone has been able to utter those words, and naturally it is big news for the real estate industry. For more on this, read the following article from HousingWire.
Home prices across the U.S. rose a seasonally-adjusted 1.7 percent from December 2008 to January 2009, according to a monthly index released Tuesday by the Federal Housing Finance Agency (FHFA). The January index marked the first gain overall for the U.S. since February 2008’s index, which had risen slightly over January 2008’s level.
The index compares with the November-to-December data, which showed a 0.2 percent decline (revised from the previously reported 0.1 percent increase). The slight monthly gain was erased by the 6.3 percent overall decline for the 12 months ending January 2009. The U.S. index is steeply below — 9.6 percent — its April 2007 peak value, FHFA said.
The index showed that monthly price changes varied sharply across different regions. The East North Central census division (covering Michigan, Wisconsin, Illinois, Indiana and Ohio) experienced the strongest growth in home prices, which were up 3.9 percent from December. The South Atlantic (from Delaware, Maryland and the Virginias to the Carolinas, Georgia and Florida) followed closely with its 3.6 percent increase. The Pacific division (covering Hawaii, Alaska, Washington, Oregon and California) was the only area to post a decline in home prices for January’s data, 0.9 percent below the December level. West South Central (from Oklahoma and Texas to Arkansas and Louisiana) remained flat, with a zero percent change from December.
The index is calculated from purchase prices of homes with Fannie Mae (FNM: 0.8147 -4.15%) or Freddie Mac (FRM: 3.00 -0.66%) mortgages and is subject to month-to-month changes in the geographic volume of sales, FHFA said. The agency also said the volume of sales in January were relatively low, and future revisions of the month’s data could result in “significant” changes. “The January home sales reflected in the FHFA data disproportionately occurred in areas with the strongest markets,” FHFA officials said in a media statement. “While it is difficult to perfectly control for changing geographic mix in estimating house price indexes, the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic.”
This article has been reposted from HousingWire. View the article on HousingWire’s mortgage finance news website here.