House prices continued to rise in July, contributing to the overall recovery in the housing market. According to the most recent release by the Federal Housing Finance Agency, U.S. house prices rose by 1.0% on a month-over-month seasonally adjusted basis in July. This is the 18th consecutive monthly increase for the House Price Index – Purchase Only. Since January 2012, house prices have risen by 12.5%.
Meanwhile, Standard and Poor’s also reported that house prices rose in July. According to the most recent release, the S&P/Case-Shiller House Price Index –20 City Composite grew by 12.4% over the past year. This is the 14th consecutive year-over-year increase registered by the index. Since March 2012, house prices, as measured by the S&P/Case-Shiller House Price Index, have risen by 21.2%.
According to the FHFA, house prices nationally are 14% above the trough reached in April 2007. However, they remain 10% away from their pre-recession peak. As Chart 2 illustrates, home prices in most areas have exhibited a sustained recovery, but have not yet returned to their pre-recession peak, a situation that keeps a portion of homeowners in a negative housing equity position.
Chart 2 also indicates that the regions of the country with the largest increases typically still have the most to rise before reaching their peak level. For example, house prices in the Pacific region have climbed by 27% from their trough, but house prices in that region are still 23% below their peak level. The Pacific region includes Hawaii, Alaska, Washington, Oregon, and California. According to Standard and Poor’s/Case-Shiller, house prices in Los Angeles, San Diego, and San Francisco have risen by 30%, 30%, and 50% from their respective troughs, but house prices in these cities remain 25%, 25%, and 19% away from their respective peaks. House prices in Seattle have risen by 28% from their trough, but are 17% below their peak level.
In contrast, house prices in the West South Central region of the country have fully recovered their pre-recession peak level. As of July 2013, house prices in this region are 12% above their trough and, despite the recent month-over-month decline, are 7% above their pre-recession peak. The West South Central region is composed of Oklahoma, Arkansas, Texas, and Louisiana. According to Standard and Poor’s/Case-Shiller, house prices in Dallas are currently 17% above their trough and 4% above their June 2007 peak.
For full histories of the FHFA US and 9 Census divisions, click here.
For full histories of the composites and 20 markets included in the Case-Shiller composites, click here.