Low Mortgage Rates Put a Floor on Home Prices
The Federal Housing Finance Agency released their U.S. Monthly Housing Price Index yesterday showing home prices increased 0.7 percent from January 09 to February 09. This is the second consecutive monthly increase, last month's index showed housing prices increased 1.0 percent. Year over year housing prices across the U.S. are still down 6.5 percent and down 9.7 percent of the housing price peak in April 2007. The rate of home price increases varied by region and three areas of the country still saw a decline in home prices. Prices in the Pacific region saw the most dramatic increase of 3.8 percent the last month, but also the most dramatic decline over the past 12 months, prices decreased 19.1 percent in the region. Home price change by census region: Pacific Census home prices up 3.8%: Includes Hawaii, Alaska, Washington, Oregon and California Mountain Census home prices up 0.1%: Includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico West North Central home prices up 1.5%: Includes North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri West South Central home prices up 1.9%: Includes Oklahoma, Arkansas, Texas and Louisiana East North Central home prices down 1.2%: Includes Michigan, Wisconsin, Illinois, Indiana and Ohio East South Central home prices down 0.2%: Includes Kentucky, Tennessee, Mississippi and Alabama New England home prices up 2.2%: Includes Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut Middle Atlantic home prices up .07%: Includes New York, New Jersey and Pennsylvania South Atlantic home prices down 0.8%: Includes Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida Source: The Federal Housing Finance Agency Since the U.S. Monthly Housing Price Index is calculated using purchase prices of homes backing mortgages that have been sold to or guaranteed by Freddie Mac or Fannie Mae it isn't a barometer of the entire U.S. housing market. Freddie Mac and Fannie Mae only purchase or gurantee mortgages under a particular dollar amount, known as conforming mortgages. |
Record low mortgage rates have seem to put a stop to falling home prices in most areas of the United States. Housing prices have actually increased in large parts of the country the past month.
