FHFA House Prices Declined in July
by:Sandy Batten
|in:Economy in Brief
Summary
- This was the first monthly decline since May 2020 and only the second since January 2017.
- House prices posted monthly declines in eight of nine census divisions.
The Federal Housing Finance Agency (FHFA) House Price Index fell 0.6% m/m (+13.9% y/y) in July following a tepid 0.1% monthly gain in June, which was not revised. This was the first monthly decline since May 2020 and only the second since January 2017, indicating that the Fed's aggressive tightening of monetary policy is beginning to temper the previously torrid rise in house prices. Prior to the June and July readings, house prices had risen 1% or more in 23 of the previous 24 months. The fall in the year-on-year rate of increase in July was to the lowest rate since February 2021.
The decline in house prices was widespread with prices falling in July from June in eight of the nine census divisions. The only exception being an extremely modest 0.1% m/m gain in the East North Central region. The largest decline was a 1.6% m/m drop in the Pacific region. Other declines of note were a 1.1% m/m decline in New England and a 1.0% m/m fall in the Mountain region. The smallest decline was a 0.1% m/m drop in the West North Central region.
House prices continued to advance in July from a year ago but the pace of advance declined in every census division. The slowest annual increase was posted by the Pacific region at 10.0% while the South Atlantic region reported the largest annual rise at 18.9%.
The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancings on the same kinds of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.
The FHFA data are available in Haver's USECON database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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