Mixed Result for House Prices in August


The growth in house prices observed over the previous four months moderated in August. A modest increase in the Case Shiller house price index (HPI) was offset by a slight decline in the Federal Housing Finance Agency (FHFA) HPI. Standard and Poor’s reported a 0.2% (NSA) gain in both the Case-Shiller Composite 20 (CS20) and Composite 10 (CS10) house price indexes (HPIs), while FHFA reported a 0.1% (SA) decrease in their monthly HPI. FHFA also revised down its July estimate from a previously reported 0.8% to no change.

While house prices have been improving in recent months, the steady decline in prices in late 2010/early 2011 has left house prices down still on a year-over-year basis. Relative to August 2010, the Case-Shiller Composite 20 is down 3.8%, the Composite 10 is off 3.5% and the FHFA HPI has declined 4.0%.


Prices improved in 10 of the 20 cities covered by the Case-Shiller index on a non-seasonally adjusted basis. Washington DC (+1.6% NSA), Detroit (+1.4%) and Chicago (+1.4%) experienced the largest percentage point gains in house prices, while Atlanta (-2.4%) experienced the largest decline. All other cities experienced only modest change of between plus or minus 0.4%. Charts that present the historical HPI data for each of the 20 metropolitan areas are available by following this link.

The slight decline in the FHFA HPI in August was the result of weakness in the West North Central (-1.3% SA) and Mountain (-0.9%) divisions. This offset a gain of 0.9% in the South Atlantic division. West South Central division and East North Central division showed no change, while the remaining four divisions experienced a modest (-0.5% or less) decline. The FHFA state-level HPI data are updated quarterly, and can be observed by following this link

Standard and Poor’s pointed to the “continued improvement in the annual rates of change in home prices” as the good news in the August house price data. The annual rate of change improved in both composites and 16 of the 20 MSAs. Of the 20 metropolitan areas covered by the index, only Detroit (+2.7%) and Washington DC (+0.3%) have positive annual rates of change. All others were down relative to July last year, with Minneapolis (-8.5%), Phoenix (-7.7%), Portland (-7.6%) faring the worst.

Standard and Poor’s noted “the Midwest is one region that really stands out in terms of relative strength. Chicago, Detroit and Minneapolis have all posted monthly increases going back to May.” The Case-Shiller data indicate Detroit registered the largest gain of any of the 20 metropolitan areas covered, with a house price increase of 2.7% versus August 2010. The FHFA data also support this, with the East North Central division increasing or remaining stable over the past five months—with an overall gain of 5.6% (NSA) since March 2011.

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