Home Prices Rise in February

WASHINGTON, DC March 25, 2009 U.S. home prices rose 1.7 percent on a seasonally-adjusted basis from December to January, according to the Federal Housing Finance Agencys (FHFA) monthly House Price Index. In December, the FHFA first reported a 0.1 percent increase, which was later revised to a 0.2 percent decline. FHFA ( www.fhfa.gov ) regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as authorized by the Housing and Economic Recovery Act of 2008.

For the 12 months ending in January, U.S. prices fell 6.3 percent, and the U.S. index is 9.6 percent below its April 2007 peak.

The FHFA monthly index is calculated using the purchase price of houses sold or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally-adjusted monthly price changes from December to January ranged from -0.9 percent in the Pacific Division to +3.9 percent in the East North Central Division.

Month-to-month changes in the geographic mix of sales activity explain most of the unexpected rise in prices in January. Home sales disproportionately occurred in areas with the strongest markets, according to the release issued by FHFA. While it is difficult to perfectly control for changing geographic mix in estimating house price indexes, the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic, according to the FHFA release.

Reported sales volume, in absolute terms, was relatively low in January. As a result, the FHFA warns that relatively large revisions could occur later.


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