House prices turned the corner in October, registering their first increase in four months, according to the Federal Housing Finance Agency (FHFA) with the release of their monthly purchase-only house price index (HPI). Overall, house prices were up 0.7% on a seasonally adjusted basis, following a 1.2% decline in September.
The FHFA HPI release includes the monthly price changes for the nine census divisions. An increase in the HPI was observed in six divisions, with the largest rise observed in the East North Central (2.1%), South Atlantic (1.6%) and Middle Atlantic (1.2%) divisions. House price declines were observed in the East South Central (-2.3%), West South Central (-0.9%) and New England (-0.3%) divisions.
Today’s house price numbers support the NAHB view that, while house prices will show some volatility through the end of the year, overall they will continue the trend of relative stability experienced since early 2009. No further significant declines in the house prices are expected. Stable house prices will be supported by improving housing demand, with existing home sales growing strongly in three of the past four months and expected to continue to grow steadily to a healthy sustainable level in 2011.