The House Price Index (HPI) data reported by the Federal Housing Finance Agency (FHFA) shows house prices rose at an annual growth rate of 5.4 per cent in May, higher than the 4.7 per cent in April and the 3.8 per cent in March. The Standard and Poor’s/Case-Shiller reported that the Home Price Index rose at an annual growth rate of 0.5 per cent in May, slightly higher than the 0.4 per cent in April.
Meanwhile, the National Association of Realtors’ Pending Home Sales Index declined in June after reaching the highest level in over nine years in May, the agency said Wednesday.
US House Prices, Pending US Home Sales: June and May 2015
The annualized growth rates of the Federal Housing Finance Agency (FHFA) and the Standard and Poor’s/Case-Shiller home price indexes have been volatile month to month, but provide a detailed measure of the pre-boom stability, boom period acceleration, subsequent collapse, and recovery of prices.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased 1.8 per cent in June, but is up 8.2 per cent from the same month a year ago, and has increased year-over-year for ten consecutive months.
Regionally, 3 per cent declines in the Midwest and South were only partially offset by small increases in the Northeast and West. Year-over-year, the PHSI was up 12 per cent in the Northeast, 10.4 per cent in the West, 7.8 per cent in the South and 5.0 per cent in the Midwest.
The earlier string of positive pending sales releases in 2015 was consistent with a strong report last week as existing sales reached a pre-recession level. The June PHSI is a small bump in the road, and follows last week’s similar decline in new home sales, which are also based on contracts. However, the longer view suggests continued good news for the existing sales market and for builders in 2015.