FHFA House Price Index Up 0.2% In April

real estateJill Mislinski:  The Federal Housing Finance Agency (FHFA) has released the U.S. House Price Index (HPI) for the most recent month. Here is the opening of the report:

U.S. house prices rose in April, up 0.2 percent on a seasonally adjusted basis from the previous month, according to the Federal Housing Finance Agency (FHFA) monthly House Price Index (HPI). The previously reported 0.7 percent increase in March was revised upward to reflect a 0.8 percent increase. [Link to report]

The chart below illustrates the HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.

House Price Index

In the chart above we see that the nominal HPI index is now at its its pre-recession peak of what’s generally regarded to have been a housing bubble. Adjusted for inflation, the index remains well off its historic high.

The next chart shows the growth of the nominal and real index since the turn of the century.

HPI Growth since 2000

For an interesting comparison, let’s overlay the HPI and the most closely matching subcomponent of the Consumer Price Index, Owners’ Equivalent Rent of Residences (OER). Note: For an explanation of OER, see this PDF commentary from the Bureau of Labor Statistics.

HPI versus OER

HPI and OER moved in close parallel from the 1991 inception date of the former until early 1999, when the two parted company and HPI began accelerating into the housing bubble.

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