Surging Home Prices Reach Best Level Since July 2005
Homebuyers are not finding much relief in the housing market this year as home prices continue to climb higher. According to the latest Federal Housing Finance Agency report, home prices increased 1.3 percent in first quarter, representing the 11th consecutive quarterly gain.
The House Price Index has not logged a quarterly decline since 2011, and it reached its best level since July 2005. The index gained 1.2 percent in the previous quarter and 1.8 percent in the third quarter of 2013. In fact, the purchase-only HPI rose in 42 states and Washington, D.C., in the first quarter. On a monthly basis, home prices rose 0.7 percent in March from February when seasonally adjusted. The FHFA index is based on single-family homes with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
“Although the first quarter saw relatively weak real estate transaction activity — in part due to seasonal factors — home prices continued to push higher in the first quarter,” said FHFA principal economist Andrew Leventis in a press statement. “Modest inventories of homes available for sale likely played a significant role in driving the price increase, which was similar to appreciation in the preceding quarter.”