Thursday, June 21, 2012

Home price growth in mountain region hits 5-year high

House prices in April in the Mountain region, which includes Colorado, were up substantially, rising 6.4 percent, year-over-year from April 2011 to April 2012. Nationally, the house price index rose 3.03 percent over the same period. The new house price index numbers, released last week by the Federal Housing and Finance Agency, also showed that the national index is down 17.6 percent from the peak level reached in June 2007, while the Mountain region's index is down 28.3 percent over the same period.

The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.

April's year over year increase is the third monthy increase in a row this year following more than four years of monthly declines.

Although it has shown more negative growth than other indices in recent years, the decline in FHFA monthly house prices in the region generally reflects overall trends also found in other home price indices such as the CoreLogic index and the Case-Shiller index. According to FHFA, prices have largely stabilized over the past several months, but remain slightly down from 2009 and 2010 levels. Home prices in Colorado and the Denver area are slowly increasing in other indices and have shown growth for the past 2-3 months, depending on the index.

The second graph shows each month's house price index compared to the same month a year earlier:

April 2012 was the 3rd month in a row during which the house price index fell year over year, following 52 months of year-over-year declines. 

The overall trend among most home price indices is one of slowly increasing prices in recent months. This trend includes Colorado statewide as well as the metro Denver area.