Haver Analytics
Haver Analytics
USA
| Oct 25 2022

U.S. FHFA House Prices Fall for the Second Straight Month in August

Summary
  • -0.7% m/m in August, the second monthly drop since May 2020.
  • House prices fall m/m in seven of nine census divisions; house prices in New England rebound while in the West North Central region house prices were unchanged.
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U.S. house prices fell 0.7% m/m in August after an unrevised 0.6% decline in July and a 0.1% uptick in June, according to the Federal Housing Finance Agency (FHFA) House Price Index. The August reading was the second monthly fall since May 2020's -0.3%. Rising mortgage rates put pressure on demand, weakening house price growth. Importantly, the Fed's aggressive tightening of monetary policy is continuing to temper the previous house price rises. During the June 2020 to May 2022 period, house prices had risen between 0.9% (the lowest in September 2021) and 1.9% (the highest in February 2022). The year-on-year rate of increase eased to 11.9% in August, the lowest since December 2020, from 13.9% in July.

The month-on-month decline in house prices was evident with prices falling in August in seven of the nine census divisions: Mountain (-2.0%), Pacific (-1.3%), Middle Atlantic (-0.8%), South Atlantic (-0.7%), East North Central (-0.6%), East South Central (-0.3%), and West South Central (-0.1%). House prices in the West North Central region held steady m/m in August after declines of 0.1% in July and 0.6% in June. To the upside, house prices in New England rose 0.4% m/m in August after drops of 1.1% in July and 0.5% in June.

Year-on-year house prices continued to rise in August, but the pace of advance decelerated in eight of the nine census divisions. Among the eight census divisions showing deceleration, the slowest annual increase was posted by the Pacific region at 7.4% in August (vs. 10.0% in July) while the South Atlantic region reported the largest annual rise at 16.2% in August (vs. 19.0% in July). New England was an exception with its y/y rate accelerating to 12.2% in August from 11.6% in July.

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 refinancing 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.

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  • Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations.   Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia.   Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.

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