Washington, D.C. – U.S. house prices fell in the third quarter of 2010 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only House Price Index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 1.6 percent lower on both a seasonally adjusted and unadjusted basis in the third quarter than in the second quarter of 2010. Over the past year, seasonally adjusted prices fell 3.2 percent from the third quarter of 2009 to the third quarter of 2010. The quarterly report analyzing housing price appreciation trends was released today by FHFA.
FHFA’s seasonally adjusted monthly index for September was down 0.7 percent from its August value. The monthly increase for the July to August period was revised from an initial estimate of +0.4 percent to 0.0 percent (flat prices).
While the national, purchase-only house price index fell 3.2 percent from the third quarter of 2009 to the third quarter of 2010, prices of other goods and services rose 2.0 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 5.1 percent over the latest year.
FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, rose over the latest quarter. The index increased 1.1 percent in the latest quarter, although it is down 1.2 percent over the four-quarter period.
Significant Findings:
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Of the nine Census Divisions, the New England Division and the Mountain Division experienced the most significant price movements in the latest quarter. While prices rose 0.9 percent in New England, prices fell 4.0 percent in the Mountain Division.
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Seasonally adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 13 states and the District of Columbia. Prices rose over the latest four quarters in 10 states and Washington, D.C.
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As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Atlanta-Sandy Springs-Marietta, GA area. That area saw price declines of 10.1 percent between the third quarters of 2009 and 2010. Prices held up best in the San Diego-Carlsbad-San Marcos, CA area, where prices rose 4.6 percent over that period. The complete list of state appreciation rates are on pages 17 and 18.
The complete list of metropolitan area appreciation rates computed in a purchase-only series is on page 29 and all-transactions indexes are on pages 32–47.
Highlights
This quarter’s Highlights article analyzes the impact on the HPI of adding price information from county recorder data and FHA-endorsed mortgages. For the four states with the largest peak-to-current price declines, price trends for the "augmented" indexes are compared against developments measured in the standard HPI. Consistent with expectations, the augmented measures show greater price declines in the early part of the housing bust and slightly stronger price conditions in the latest recovery.
Background
FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 41 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 35 years.
FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Loan limits for mortgages originated in the latter half of 2007 through Dec. 31, 2008 were raised to as much as $729,750 in high-cost areas in the contiguous United States. Legislation generally extended those limits for 2009-originated mortgages. A Congressional Continuing Resolution (PL111-88) further extended those limits for 2010 originations in places where the limits were higher than those that would have been calculated under pre-existing rules.
This HPI report contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by Census Division and for the U.S. as a whole; 3) A ranking of 299 MSAs and Metropolitan Divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked.
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Please e-mail FHFAinfo@FHFA.gov for a printed copy of the report.
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The next quarterly HPI report, which will include data for the fourth quarter of 2010, will be released February 24, 2011.
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The next monthly index, which will include data through October 2010, will be released December 22, 2010.
Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030