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US Home Prices Rise 0.8 Percent
Thursday, July 1, 2010
The report shows that the increase in house value may be due to thedeadline of the first time home buyers programs that ended April 30th. Toqualify for the credit, buyers must have been locked into a valid homepurchasing contract prior to this date. The report also shows that theincentive for down payment assistance may have also helped raise the bids onthe homes.
The FHFA bases their monthly reports on data collected from homes that havebeen purchased with mortgages backed by Fannie Mae and Freddie Mac. They do notinclude any data from private lenders. The information is also seasonallyadjusted and is a combination of all the data throughout the United States.Some areas experienced higher price increases, while others saw prices drop.The information in the report is an average of all this data.
Current data shows that the largest increase in home prices happened in thewestern part of the United States. North and south western states saw alarge increase in house value, topping 1.7% in one month. North eastern stateson the other hand lost value. Home prices in the south east showed neither anincrease nor decrease in value. Data also shows that the increase is equivalentto the same time period in 2004, before the real estate boom. This is anotherindicator that the real estate market is leveling out and not continuing tofall as some have speculated. The agency believes they will see the sameresults on the May data.
The Federal Housing Finance Agency provides oversight, supervision andregulation over Freddie Mac, Fannie Mae and the Federal Home Loan Banks. Homevalue is determined by the amount that the house sold for in comparison toasking price or the amount of debt that was owed on the home. The next report isdue out on July 22, which will show data collected from May. The market will becarefully watching this report to see if the end of the tax credit means thehousing market will stagnate again.
It is the FHFA’s position to ensure that the mortgage market remains liquid andstable and that affordable housing remains available on the market.