The latest installment of the Federal Housing Finance Agency’s House Price Index (HPI) reveals that home prices rose 1.4 percent in Q3 2017, and were up 6.5 percent between Q3 2016 and Q3 2017. FHFA's seasonally adjusted monthly index for September increased 0.3 percent from August.
HPI calculations are based on home sales price information gleaned from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
In the report, Andrew Leventis, Deputy Chief Economist, said, "With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread. At some point, declining housing affordability should temper appreciation rates in some of the nation's fastest appreciating markets, but our third quarter results show few signs of that."
You can see more of Leventis’ comments in the below FHFA video analyzing Q3 2017 highlights.
According to FHFA’s HPI, those price increases could be seen from coast to coast in Q3 2017. During the quarter, home prices rose in all 50 states and the District of Columbia. In fact, the District of Columbia led the pack in terms of annual appreciation, coming in at 11.6 percent, ahead of the state of Washington (11.5 percent), Hawaii, and Arizona (the latter two states tied at 10.0 percent).
Home prices also jumped in each of the 100 largest U.S. metropolitan areas over the course of the past year. Prices increased the most in the Seattle-Bellevue-Everett, Washington metropolitan statistical area (MSA), climbing 14.6 percent in the past year. On the other end of the spectrum, prices in the Camden, New Jersey MSA were up only 0.5 percent during that period.
Breaking things down by census division, the HPI report reveals that the Pacific region boasted the strongest annual appreciation, up 8.9 percent between Q3 2016 and Q3 2017. Since Q2 2017, there has been a 1.7 percent increase for the Pacific division. Compare those numbers to the Middle Atlantic division, which showed the weakest annual price increases—only 0.5 percent.
In spite of the increased house prices across the board, a First American Real Home Price Index released last week showed that real house prices were 17.9 percent below the level of real house prices measured in January 2000, and 38.9 percent below their housing boom peak from July 2006.
You can read more about FHFA’s House Price Index by clicking here.