House Prices Increased in April

House Prices Increased in April
June 22, 2011 by Danielle Hale, Research Economist · 1 Comment
Filed under: Home Price Measures
Home prices increased 0.8 percent from March to April according to Federal Housing Finance Agency (FHFA) data released today, the first monthly increase since May 2010. This headline figure is from FHFA’s seasonally adjusted price index—a measure that adjusts for the fact that the housing market has very strong seasonal patterns. In this case, house prices typically see a bump from March to April, so the non-seasonally adjusted increase of 1.8 percent is actually adjusted down to show the 0.8 percent increase.

Yes, the previous months of weakness still play out in the year over year data which show a 5.7 percent decline, but this new data could be an indication of firming prices. In last month’s House Price Monitor, we saw an indication of firming prices in the CoreLogic distressed-excluded house price series which continued in April even in the all-transaction series, and NAR median price data—which is more timely than other series—increased on a month over month basis in March, April, and May.
FHFA house price data come from home purchase transactions that involve a Fannie or Freddie loan. Because Fannie and Freddie loans are issued everywhere in the country, FHFA’s price index has broad geographic coverage much like NAR’s median house price series. This is in contrast to Case Shiller’s more limited geographic coverage.
One other result of relying on Fannie and Freddie loan data is that the FHFA HPI does not have information on all-cash purchases. By contrast, NAR’s median price includes information on all transactions that are listed on a multiple listing service while Case Shiller data includes purchases that are recorded in county records.
Next Tuesday, June 28, Case Shiller will release their April data (an average of data from February, March, and April). Other price series had weak performance in February, so it will not be surprising for Case Shiller to come in below the other estimates and show continued decline, but given the improvements seen in March and April, even Case Shiller data should show that April was better than March. Look out for the June NAR House Price Monitor, a presentation that summarizes recent data from different house price measures along with their strengths and weaknesses, to be available once the Case Shiller data is released.