Home prices edged up 1.5 percent in the fourth quarter of 2016, totaling 6.2 percent from the fourth quarter of 2015, according to the Federal Housing Finance Agency’s (FHFA) recently released House Price Index (HPI). The HPI—based on prices for homes with Fannie Mae- and Freddie Mac-backed mortgages—came in 0.4 percent higher month-over-month in December.
Per the Index, home prices increased in the majority of states, as well as the District of Columbia, from the fourth quarter of 2015 to the fourth quarter of 2016. The upward trend was propelled by activity in Oregon (11.0 percent increase), Colorado (10.6 percent), Florida (10.4 percent), Washington (10.2 percent) and Nevada (8.9 percent), with the Tampa-St. Petersburg-Clearwater, Fla., metropolitan area showing the most growth: 13.2 percent. At the other end of the spectrum, Wilmington, Del.-Md.-N.J., showed the least growth: -1.8 percent.
“Although interest rates rose sharply during the fourth quarter, our data show no signs of a home price slowdown,” said Andrew Leventis, FHFA deputy chief economist, in a statement. “Although it will certainly take more time for the full effects of elevated interest rates to be felt, there is no evidence of a normalization in the unusually low inventories of homes available for sale, which has been the primary force behind the extraordinary price gains.”
According to the National Association of REALTORS® (NAR), the housing supply shortage continued in January, down 7.1 percent from January 2016.
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