Friday, March 22, 2013

FHFA: Colorado home price index up for fourth quarter in a row

Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), rose 3.1 percent from the fourth quarter of 2011 to the fourth quarter of 2012. According to the fourth-quarter 2012 HPI, released last week by FHFA, the home price index for Colorado, in year-over-year comparisons, has risen for the fourth time in a row, and has shown the strongest year over year growth in a decade.

The Colorado HPI is now down 6.8 percent from the peak in the state's HPI which was reached during the third quarter of 2006. The national index is down 21.5 percent from its peak, which it also reached during the third quarter of 2006.

The HPI for the United States rose 5.4 percent from the fourth quarter of 2011 to the fourth quarter of 2012, and until the second quarter of 2012, the national HPI had not shown a year-over-year increase since the first quarter of 2007.

The first graph shows the Colorado HPI compared to the US HPI since 2000. Since the peak period, the US HPI has fallen farther than the Colorado index. The Colorado index turned up significantly during the second quarter of 2012.

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 years for both Colorado and the US. The national HPI has fallen farther -or increased less- than the Colorado HPI in every quarter since the second quarter of 2007. The home price index in Colorado has been increasing longer than the US as a whole, although Colorado showed less growth than the nation in the index from 2001-2007.

Overall, this index suggests that, since 2007, overall home prices in Colorado have been more resilient than has been the case nationally, and this matches up with several other indices such as those put out by Case-Shiller and CoreLogic.

The index values presented and analyzed in this article are not seasonally adjusted.

Note: During the second quarter of 2011, the Federal Housing and Finance Agency released, for the first time, its Expanded-Data House Price Index. The new index is "Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick[.]"

In other words, the data source is much more broad than the old index which relied only on GSE information.

However, at the metro-area level, we'll still need to rely on the older GSE-data index until FHFA expands its new index into the metro areas.

The final graph adds in the Denver-Aurora index, which is also calculated using the Expanded Index formula.  As can be seen in teh graph, the Denver-Aurora area's index is very similar to that of the state overall. This is not surprising, given that so many of the home sales that do take place in the state happen in the metro Denver area.