Home Prices Near Pre-Recession Peak, as Gains Slow

Home prices nationally, which essentially flat-lined in September,rnappear to have resume a moderate rate of increase.  The Federal Housing Finance Agency (FHFA) saidrnon Tuesday that its home price index, unchanged from August to September,rnposted a 0.6 percent increase in October. The October index for the entire U.S.rnwas 215.4, up from 214.2 the previous month. rnThe October number was 4.5 percent higher than the index in Octoberrn2013.  </p

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FHFA’s HPI is calculated using home sales prices fromrnmortgages sold to or guaranteed by the government sponsored enterprises FanniernMae and Freddie Mac.  The index is basedrnon this calculation in January 1991 when it was set at 100.</p

The HPI increased in six of the nine census divisions, thernexceptions being the previously high-flying Pacific division where the HPI wasrndown 0.3 percent, the first time since at least May 2013 that this divisionrnposted a decline.  West South CentralrnDivision was down 0.2 percent and the Middle Atlantic division has a 0.1rnpercent dip.  The greatest increases werernin the South Atlantic which was up 1.5 percent, the East North Central and EastrnSouth Central which rose 1.1 percent and 0.8 percent respectively.</p

The U.S. index has recovered to within 5.1 percent of itsrnApril 2007 peak however the rate of appreciation has slowed considerably overrnthe last year.  Where the HPI posted anrnannual increase in October of 4.5 percent, the gain from October 2012 tornOctober 2013 was 8.1 percent.  </p

Some deceleration in price gains occurred in all but onernregion and was particularly dramatic in the Pacific division where a 17.3rnpercent gain in the 12 months ended October 2013 became a 6.0 increase thernfollowing year.  Increases in the Westrnalso slowed, going from 12.8 percent to 5.1 percent in the two relevant timernperiods.</p

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FHFA said that its HPI for October indicates that pricesrnnationally are roughly the same as they were in September 2005. 

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