U.S. home prices rose 1.4% in the fourth quarter of 2014 compared to the third quarter, according to the Federal Housing Finance Agency's (FHFA) Home Price Index (HPI), which is based on home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
It was the fourteenth consecutive quarter where home prices increased on a quarter-over-quarter basis, according to the report.
The FHFA's seasonally adjusted monthly index for December was up 0.8% compared to November.
Year over year, home prices rose 4.9% compared to the fourth quarter of 2013.
‘Contrary to prior indications of a possible slowdown, home price appreciation in the fourth quarter was relatively strong,’ says Andrew Leventis, principal economist for the FHFA, in a release. ‘The key drivers of appreciation over the last few years – low inventories of homes available for sale and improvement in labor markets – likely played a role in driving up prices during the quarter.’
FHFA's expanded HPI, which includes transaction information from county recorder offices and the Federal Housing Administration, shows that home prices rose 1.3% in the fourth quarter compared to the third quarter and were up 6% compared to the fourth quarter of 2013.
The seasonally adjusted, purchase-only HPI rose 4.9% in the fourth quarter compared to the third quarter, while prices of other goods and services rose only 0.4%. The inflation-adjusted price of homes rose approximately 4.5% over the previous year.
States that saw the most home price appreciation in the fourth quarter included the District of Columbia (12.5%), Nevada (9.0%), North Dakota (8.4%), Colorado (7.9%) and Michigan (7.8%).
Looking at cities, the San Francisco-Redwood City-South San Francisco, Calif., area saw the most home price appreciation in the fourth quarter at 6.0%. Meanwhile, El Paso, Texas, saw home prices fall the most in the fourth quarter, at -6.6%.
Among the nine census divisions tracked in the FHFA's report, the Mountain division experienced the strongest increase in the fourth quarter, with home prices up 1.8% quarter over quarter and up 5.5% year over year.
Home price appreciation was weakest in the New England division, where prices fell 0.03%, quarter over quarter.
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