Economy

Economic Data Roundup (11/28/2017)

11/28/17 12:00 PM

iStock-518525591.jpgThe Federal Housing Finance Agency’s (FHFA’s) national home price index (HPI) rose by 0.3 percent in September (lagged release), down from August’s upward-revised 0.8 percent increase and well below the 0.6 percent gain economists expected. On a year-over-year basis, home prices grew by 6.3 percent in September, down from 6.7 percent in August and the slowest pace of annual growth recorded since January. Despite the recent weakness, the HPI has still risen for 68 months in a row, and home prices have increased in all 50 states and the District of Columbia between the third quarter of 2016 and Q3 2017, according to the FHFA.

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The top five regions in terms of annual price appreciation are the District of Columbia (+11.6 percent), Washington (+11.5 percent), Hawaii (+10.0 percent), Arizona (+10.0 percent), and Nevada (+9.6 percent). FHFA deputy chief economist Andrew Leventis added that “With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread. At some point, declining housing affordability should temper appreciation rates in some of the nation’s fastest appreciating markets, but our third quarter results show few signs of that.” Some economists also like to compare the HPI to the owners' equivalent rent section of the monthly consumer price index (CPI) report from the U.S. Bureau of Labor Statistics to help spot price bubbles. As the chart below shows, home values have increased significantly in recent years but remain below the extremes seen prior to the last recession.

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Sources: Econoday, U.S. FHFA, FRBSL

Post author: Charles Couch