Housing Prices on the Rise in All States 🏡

The Federal Housing Finance Agency’s (FHFA) most recent monthly report of its House Price Index (HPI) recorded a 0.2% increase in home prices for April. FHFA HPI (Home Price Index) is a broad economic measure of the movement of single-family house prices in the United States, tracking seasonally-adjusted purchase data. It differs from the S&P CoreLogic Case-Shiller Composite as HPI is based solely on mortgages that have been purchased or securitized by Fannie Mae or Freddie Mac. Since the index originated in 1991, home prices have increased by over 424%. 

‍

‍

The HPI’s annual year-over-year growth has been positive each quarter since the start of 2012. In the most recent report, house prices had increased 6.6% year-over-year. This trend of rising house prices over the last year is consistent across the country.

\All nine FHSA-declared regions saw annual increases in home prices, with the Mid-Atlantic having the highest jump at 9.9% and West South Central seeing the smallest growth at 3.6%. All 50 states saw elevated home prices, with multiple Plotify markets such as Pennsylvania (Pittsburgh) and Georgia (Atlanta) seeing their home prices increase above the U.S. average, at 7.9% and 7.2% YoY, respectively. The District of Columbia had the only reported negative yearly growth at -1.5%.

‍

‍

‍

Home price growth can often be tied to other housing market data points, such as the 30-year fixed mortgage rate and the inventory of homes for sale. While mortgage rates have consistently hovered between 6% and 8% over the last year, the low supply of existing homes for sale has put upward pressure on home prices. According to Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics, “U.S. house prices continued to rise in April, however, the appreciation rate slowed amid a slight rise in both mortgage rates and housing inventory.”

Experts continue to watch the Fed's monetary policy and its effect on home prices through its impact on mortgage rates and inventory. Nevertheless, sustained growth in home prices is making it more difficult for potential buyers to afford to purchase homes, pushing them toward the rental market. 

‍

Plotify’s Takeaway

• The United States HPI continues to increase year-over-year, most recently at 6.3%
• Each region and all 50 states saw increased house prices over the year
• A low supply of houses and high interest rates have put upward pressure on house prices

‍