House Prices Improving, But Results Are Mixed

The decline in the quarterly HPI contrasts with recent movement in FHFA's seasonally adjusted monthly house price index.

The quarterly Federal Housing Finance Agency purchase-only house price index continued to fall in the second quarter, despite recent improvement in the monthly HPI. According to FHFA, U.S. house prices were 0.6 percent lower in the second quarter than the first quarter of 2011 and down 5.9 percent on a year-over-year basis.

This represents the 17th consecutive quarterly decline in the purchase-only HPI. Overall, the index has fallen 19.2 percent since reaching a peak in the first quarter of 2007. Declines in seasonally adjusted purchase only HPIs from first quarter to second quarter were observed in 31 states.

The largest quarter-over-quarter declines were observed in Nevada (-5.5 percent), Delaware (-5 percent), West Virginia (-4.8 percent), Arizona (-4.6 percent), and Rhode Island (-3 percent). States with the largest sequential gains included the District of Columbia (+7.2 percent), Hawaii (+5.5 percent), Oklahoma (+4.1 percent), Connecticut (+2.1 percent) and Montana (+1.6 percent).

On a regional basis, an increase was observed in the seasonally adjusted purchase-only HPI in seven of the nine Census Divisions (and all nine divisions on a not seasonally adjusted basis). East North Central (+3.3 percent), Middle Atlantic (+1.2 percent) and West North Central (+1 percent) registered the largest gains, while Pacific (-0.8 percent) and New England (-0.4 percent) divisions experienced a decline.

The monthly HPI experienced its third consecutive increase in June, rising 0.9 percent, following increases of 0.3 percent in April and 0.4 percent in May. The year-over-year change is also significantly different from the quarterly HPI, with the monthly index down 4.3 percent year-on-year.

- Courtesy of NAHB