U.S. home prices increased 1.3% in the third quarter compared with the second quarter and were up 5.7% compared with the third quarter of 2014, according to the Federal Housing Finance Agency (FHFA).
It was the 17th consecutive quarter that home prices increased in the purchase-only, seasonally adjusted index, which is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
Looking at home price appreciation on a monthly basis, home prices in September increased 0.8% compared with August, the FHFA reports.
‘The long-anticipated slowdown in home price appreciation did not occur in the third quarter,’ says Andrew Leventis, principal economist with the FHFA, in a release. ‘The factors that have contributed to extraordinary price growth over the last few years – low interest rates, tight inventories, strong buyer confidence and improving income growth – continued to drive prices upward in much of the country. However, as prices continue to rise, reduced affordability will be a stronger market headwind.
Home prices rose in every state except for West Virginia in the third quarter, the FHFA reports. States that saw the most home price appreciation in the third quarter, on a year-over-year basis, included the District of Columbia (15.4%), Colorado (12.7%), Nevada (12.4%), Oregon (10.0%) and Florida (10.0%).
Of the nine census divisions, the Mountain division experienced the strongest gains in the third quarter – increasing 2.4% compared with the second quarter and 9.0% compared with the third quarter of 2014.
Home price appreciation was weakest in the New England division, the FHFA reports.
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