Colorado's House Price Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), fell 2.5 percent from the first quarter of 2010 to the same period this year. According to the first quarter HPI, released today by FHFA, the home price index for Colorado, in year-over-year comparisons, has fallen for the eleventh quarter in a row.
The Colorado HPI has now fallen six percent since the first quarter of 2007 when the HPI began to plateau.
In spite of these declines, however, the Colorado HPI has fallen less than the national HPI.
The HPI for the United States fell 3.1 percent from the first quarter of 2010 to the same period this year, and the national HPI has not shown a year-over-year increase since the third quarter of 2007.
Since the first quarter of 2007, when price indices began to plateau, the US HPI has fallen 14 percent.
The first graph shows the Colorado HPI compared to the US HPI since 2000. Since the peak period, the US HPI has fallen farther and faster than the Colorado index.
The US price index can be described as more "bubble-like" than the Colorado index which did not experience a run up in prices to the same degree as was the case in the national index. In turn, the correction has been more mild.
In the second graph is shown the year-over-year change in the HPI for both Colorado and the US. This more fully shows to what degree the HPI has fallen in recent year for both Colorado and the US. The national HPI has fallen farther than the Colorado HPI in every quarter since the third quarter of 2007.
Interestingly, this graph can be contrasted with the same graph for monthly changes in the national HPI vs. the HPI for the Mountain Region. Each month, we report on the monthly HPI which only provides detail down to the regional level. At the regional level, however, the difference between the national HPI and the local HPI is quite different. The HPI in the Mountain Region has actually fallen faster than the national HPI in recent months. What the statewide level data tells us is that Colorado is not the reason that the HPI in the mountain region is being pulled down further than the US HPI. This effect should be attributed to the fact that Arizona and Nevada are included within the Mountain Region, and it is likely that those two states are driving down prices at the regional level.
A note on method: FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings on the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 43 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 36 years
The index values presented and analyzed in this article are not seasonally adjusted.