House Prices Continued to Rise in October
US and UK GDP Were Revised Downward in 3Q15 on Sluggish Growth
House prices rose 0.5% in October
According to the Federal Housing Finance Agency (or FHFA), the House Price Index (or HPI) rose 0.5% in October 2015 against a downward-revised 0.7% rise in September 2015. This is another month of a solid jump in house prices, beating the consensus estimate of 0.4%.
Real estate stocks rose
Home prices have risen 6.1% over the past year. With the rise in the house prices, the SPDR S&P Homebuilders ETF (XHB) has risen 1.7% from a year ago as of December 22, 2015.
Also, real estate stocks such as Simon Property Group (SPG), Equity Residential (EQR), Crown Castle International (CCI), and Public Storage (PSA) have risen 4.0%, 9.3%, 10.1%, and 32.6%, respectively, over the past year as of December 22.
12-month changes remain positive
The FHFA HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.
For the trailing-12-month period, changes have been all positive, ranging from 2.9% in the New England division to 8.9% in the Mountain division.
Monthly price changes from September 2015 to October 2015 were positive in six out of nine census divisions. Price changes ranged from -0.5% in the New England division to 1.2% in the East South Central division.
While home prices are rising, home inventory has fallen. Rising home prices and falling home inventory have kept potential homebuyers away from home purchases.
With house prices rising, let’s see how existing home sales are catching up in the next article.
Browse this series on Market Realist:
