House Prices Inch Toward Recovery


Recently released data by Standard and Poor’s (S&P) and Case-Shiller indicates that its measure of house prices, the House Price Index – National, rose by 5.1% on a year-over-year seasonally adjusted basis (5.1% on a not seasonally adjusted basis). This is the 28th consecutive month of year-over-year increases in the house price index. Over this period of more than two years, house prices have risen by 18.0%. The S&P/Case-Shiller House Price Index is now approaching its March 2005 level.

Similarly, the Federal Housing Finance Agency (FHFA) indicates that its measure of house prices, House Price Index – Purchase Only, rose by 4.7% on a 12-month seasonally adjusted basis in August 2014 (4.8% on a not seasonally adjusted basis). This marks the 31st consecutive month of year-over-year growth. According to the FHFA, seasonally adjusted national house prices reached a peak in March 2007 before beginning their slide. However, since March 2011, house prices have begun to recover. As of August 2014, national house prices are now at 94% of the March 2007 peak.



Although house prices are now at 94% of their peak level nationally, there is some dispersion across the various regions of the country. House prices in some areas of country are closer to their peak level while others are farther away. Figure 2 shows that house prices relative to the peak level in 3 areas of the country are above the national average of 94% and in each of these 3 areas, house prices have returned to their peak level. Meanwhile, across the rest of the country, house prices relative to their peak level are below the national average.

According to Figure 2, house prices in the West South Central and in the West North Central are 1% above the peak level reached prior to the housing bust while house prices in the East South Central have returned to their pre-bust level. In contrast, house prices elsewhere in the country have yet to return to their peak level, with prices in the Pacific and in the South Atlantic farthest away.



For full histories of the composites and 20 markets included in the Case-Shiller composites, click here cs.

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

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