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House Prices Finally Turn the Corner

Federal Housing Finance Agency reported a 0.8 percent increase in their monthly purchase-only house price index in April, up to a seasonally adjusted level of 182.4.
Courtesy of NAHB
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At last, some good news on the house price front! House prices finally turned the corner in April, after 10 consecutive months of decline. This signals an end to an extended period of decline in which the index fell 5.7 percent over the past year and 19.3 percent below its April 2007 peak.

Federal Housing Finance Agency house price index release included the monthly price changes for the nine census divisions. An increase in the HPI was observed in six divisions, with the strongest rise observed in the New England (+2.2 percent) (dominated by Massachusetts), followed by the West South Central (+2.1 percent) (dominated by Texas) and East South Central (+1.8 percent).

House prices continued to decline in the Mountain (-1.3 percent) (Arizona, Nevada), West North Central (-0.6 percent) (Michigan, Illinois, Ohio) and South Atlantic (-0.2 percent) (dominated by Florida) divisions.

It may be a little early to be popping the champagne corks, as one month does not make a trend. Don't anticipate any further significant declines in house prices, but some minor month-to-month fluctuations are likely. Stable house prices over the remainder of 2011 should help to restore consumer confidence and bolster housing demand. By 2012, expect house prices to trend higher and usher in a housing market recovery that will likely run for several years.

- Courtesy of NAHB

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December 7, 2019, 4:33 am PDT

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