U.S. FHFA House Prices Increase Marginally in December, Showing Signs of Softening
Summary
- FHFA HPI +0.1% (+6.6% y/y) in Dec., the smallest m/m gain in 11 months.
- House prices rise m/m in four of nine census divisions but fall m/m in West North Central, New England, and Pacific.
- House prices gain y/y in all of the nine regions, w/ the highest rate in New England (10.1%).
U.S. house prices edged up 0.1% m/m in December after rises of 0.4% in November (+0.3% initially) and 0.3% in October (unrevised), according to the Federal Housing Finance Agency (FHFA) House Price Index. The December m/m reading was the smallest of 11 consecutive monthly increases. The HPI was at 417.85 in December, the highest index level on record, compared to a low of 281.98 in May 2020. The year-on-year rate of increase eased to 6.6% in December from a one-year-high 6.7% in November; thus, decelerating from 6.8% in December 2022 and a high of 18.9% in February 2022. In 2023, house prices rose 5.0% after having gained 13.8% in 2022 and 16.7% in 2021.
The FHFA also reported quarterly house price data today. House price appreciation showed signs of softening. In Q4'23, house prices grew 1.5% q/q, the fifth consecutive quarterly gain, slowing from a 2.1% Q3 increase. The y/y rate accelerated to 6.5% in Q4, the fastest since Q4'22, after rising to 5.6% in Q3.
The month-on-month increases in house prices were evident in December (vs. November) in four of the nine census divisions. These included South Atlantic (+0.7% vs. +0.4%), Mountain (+0.5% vs. +0.7%), Middle Atlantic (+0.3% vs. +0.4%), and East North Central (+0.1% vs. +0.4%). In contrast, house prices in the following three census divisions fell in December (vs. November): West North Central (-0.9% vs. +0.4%), New England (-0.6% vs. -0.1%), and Pacific (-0.2% vs. +0.4%). Meanwhile, house prices in East South Central were virtually unchanged m/m in December after 10 straight monthly rises and those in West South Central held steady m/m for the second successive month.
Year-on-year house prices continued to gain in December, with the pace of advance accelerating (vs. November) in five of the nine census divisions. These included New England (10.1% vs. 9.9%), Middle Atlantic (9.1% vs. 8.9%), South Atlantic (7.8% vs. 7.4%), Mountain (5.4% vs. 4.7%), and West South Central (3.3% vs. 3.1%). Meanwhile, house price growth decelerated y/y in December (vs. November) in East South Central (5.4% vs. 7.1%), West North Central (5.6% vs. 6.3%), and East North Central (8.4% vs. 9.1%). House prices in Pacific rose 4.5% y/y in both December and November.
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 the same kind 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.
Winnie Tapasanun
AuthorMore in Author Profile »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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