U.S. House Prices Climb, But Remain Below Their Pre-Recession Peak


Nationally, house prices continued to rise in the first month of 2013, contributing to the overall recovery in U.S. house prices. According to the most recent release by the Federal Housing Finance Agency, U.S. house prices rose by 0.6% on a month-over-month seasonally adjusted basis in January. This is the twelfth consecutive monthly increase for the index. Over this twelve month period, house prices have risen by 6.5%

The Census Bureau uses divisions to segment the four major regions of the country; Northeast, Midwest, South, and West. As Chart 1 illustrates, the recovery in house prices is occurring in every division of the country. However, the contribution of January house prices to the recovery in each division varied. January house prices in divisions such as West South Central, West North Central, South Atlantic, Pacific, and Mountain, and East North Central added to the overall recovery already occurring in those divisions. Conversely, house prices in New England, Middle Atlantic, and East South Central subtracted from the general recovery already underway in those regions. However, these monthly declines were comparatively small.Presentation1

While a recovery is taking place across the U.S., house prices in most divisions remain below their pre-recession peak. Only house prices in the West South Central area of the country, which includes Texas, Arkansas, Oklahoma, and Louisiana, have surpassed their pre-recession high. Previous research showed that there is a tendency for the areas where house prices declined the most to have strong rebounds. However, despite the stronger recovery experienced by these divisions, their house prices remain significantly below their peak. As Chart 2 illustrates, house prices in the Pacific, the South Atlantic, and the Mountain divisions, regions of the country that have experienced the greatest price increases, are furthest from their pre-recession high. These three divisions include the states where the house price bubbles and subsequent declines were the largest: California, Arizona, Nevada and Florida.

For full histories of the FHFA US and 9 Census divisions, click here. Presentation2

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