FEDERAL HOUSING FINANCE AGENCY

FEDERAL HOUSING FINANCE AGENCY

NEWS RELEASE

For Immediate Release November 28, 2017

Contact: Corinne Russell (202) 649-3032

Stefanie Johnson (202) 649-3030

U.S. House Prices Rise 1.4 Percent in Third Quarter

Washington, D.C. ? U.S. house prices rose 1.4 percent in the third quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.5 percent from the third quarter of 2016 to the third quarter of 2017. FHFA's seasonally adjusted monthly index for September was up 0.3 percent from August.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. FHFA has produced a video of highlights for this quarter.

"With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread," said Andrew Leventis, Deputy Chief Economist. "At some point, declining housing affordability should temper appreciation rates in some of the nation's fastest appreciating markets, but our third quarter results show few signs of that."

Significant Findings

Home prices rose in 50 states and the District of Columbia between the third quarter of 2016 and the third quarter of 2017. The top five areas in annual appreciation were: 1) District of Columbia 11.6 percent; 2) Washington 11.5 percent; 3) Hawaii 10.0 percent; 4) Arizona 10.0 percent; and 5) Nevada 9.6 percent.

Home prices rose in each of the 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in the Seattle-Bellevue-Everett, WA (MSAD), where prices increased by 14.6 percent. Prices were weakest in Camden, NJ (MSAD), where they rose 0.5 percent.

Of the nine census divisions, the Pacific division experienced the strongest annual appreciation, posting an 8.9 percent gain since the third quarter of last year and a 1.7 percent increase since the second quarter of 2017. House price appreciation was weakest in the Middle Atlantic division, where prices rose 4.8 percent annually.

Tables and graphs showing home price statistics for metropolitan areas, states, census divisions, and the U.S. as a whole are included on the following pages.

Other Price Indexes

Most statistics in the quarterly house price index report reference price changes computed by FHFA's basic "purchase-only" HPI. In some cases, however, the reported statistics reference alternative price measures. FHFA publishes ? and makes available for download ? three additional house price indexes beyond the basic "purchase-only" series. Although they use the same general methodology, the three alternatives rely on slightly different datasets as follows:

"Distress-Free" house price index. Sales of bank-owned properties and short sales are removed from the purchase-only dataset prior to estimation of the index.

"Expanded-Data" house price index. Sales price information sourced from county recorder offices and from FHA-backed mortgages are added to the purchase-only data sample. This index is used annually to adjust the maximum conforming loan limits, which dictate the dollar amount of loans that can be acquired by Fannie Mae and Freddie Mac.

"All-Transactions" house price index. Appraisal values from refinance mortgages are added to the purchase-only data sample.

Data constraints preclude the production of all types of indexes for every geographic area, but multiple index types are generally available. For individual states, for instance, three types of indexes are available. The various indexes tend to correlate closely over the long-term, but shortterm differences can be significant.

Background

FHFA's HPI tracks changes in average home prices by analyzing changes in home values for the individual properties. The underlying "repeat-transactions" methodology constructs index estimates by statistically evaluating price appreciation (or depreciation) for homes with multiple values over time. The purchase-only HPI uses sales price information from Fannie Mae- and Freddie Mac-purchased and Enterprise-guaranteed mortgages originated over the past 42 years. The purchase-only HPI is estimated with more than eight million repeat transactions. A video shows the basic methodology behind the FHFA HPI.

Note The next monthly HPI report (including data through October 2017) will be released December 21, 2017 and the next quarterly HPI report (including data for the fourth quarter of 2017) will be released February 27, 2018. Future HPI release dates for 2018 are available at . Follow @FHFA on Twitter, LinkedIn and YouTube for more HPI news.

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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.9 trillion in funding for the U.S. mortgage markets and financial institutions.

National Statistics

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FHFA Seasonally Adjusted House Price Index for U.S.

Seasonally Adjusted, Purchase-Only HPI

1991Q2 - 2017Q3

Quarter

2017Q3 2017Q2 2017Q1 2016Q4 2016Q3 2016Q2 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 2014Q2 2014Q1 2013Q4 2013Q3 2013Q2 2013Q1 2012Q4 2012Q3 2012Q2 2012Q1 2011Q4 2011Q3 2011Q2 2011Q1 2010Q4 2010Q3 2010Q2 2010Q1 2009Q4 2009Q3 2009Q2 2009Q1 2008Q4 2008Q3 2008Q2 2008Q1 2007Q4 2007Q3 2007Q2 2007Q1 2006Q4 2006Q3

House Price Quarterly

Appreciation

1.37% 1.72% 1.62% 1.68% 1.68% 1.33% 1.50% 1.58% 1.31% 1.36% 1.45% 1.35% 1.20% 0.88% 1.29% 1.11% 1.69% 2.14% 2.08% 1.58% 1.18% 1.77% 0.48% 0.16% 0.44% -0.76% -2.21% -0.97% -1.68% -0.46% -0.95% -0.08% -0.49% -1.43% -0.49% -2.93% -2.45% -2.77% -2.33% -1.76% -1.22% -0.23% 0.60% 0.51% 0.20%

House Price Quarterly

Appreciation Annualized

5.48% 6.88% 6.46% 6.72% 6.72% 5.33% 6.01% 6.32% 5.24% 5.45% 5.80% 5.39% 4.82% 3.51% 5.16% 4.43% 6.74% 8.56% 8.31% 6.32% 4.71% 7.07% 1.93% 0.66% 1.76% -3.02% -8.84% -3.90% -6.73% -1.83% -3.79% -0.32% -1.96% -5.71% -1.96% -11.73% -9.80% -11.09% -9.32% -7.04% -4.87% -0.94% 2.40% 2.02% 0.81%

House Price Appreciation From Same

Quarter One Year Earlier

6.54% 6.87% 6.46% 6.34% 6.24% 5.85% 5.88% 5.82% 5.58% 5.47% 4.97% 4.80% 4.55% 5.05% 6.37% 7.19% 7.70% 7.16% 6.77% 5.10% 3.63% 2.88% 0.33% -2.36% -3.47% -5.51% -5.23% -4.00% -3.14% -1.96% -2.92% -2.47% -5.25% -7.12% -8.39% -10.08% -8.99% -7.84% -5.44% -2.60% -0.35% 1.08% 2.06% 2.97% 4.62%

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FHFA Seasonally Adjusted House Price Index for U.S.

Seasonally Adjusted, Purchase-Only HPI

1991Q2 - 2017Q3

Quarter

2006Q2 2006Q1 2005Q4 2005Q3 2005Q2 2005Q1 2004Q4 2004Q3 2004Q2 2004Q1 2003Q4 2003Q3 2003Q2 2003Q1 2002Q4 2002Q3 2002Q2 2002Q1 2001Q4 2001Q3 2001Q2 2001Q1 2000Q4 2000Q3 2000Q2 2000Q1 1999Q4 1999Q3 1999Q2 1999Q1 1998Q4 1998Q3 1998Q2 1998Q1 1997Q4 1997Q3 1997Q2 1997Q1 1996Q4 1996Q3 1996Q2 1996Q1 1995Q4 1995Q3 1995Q2

House Price Quarterly

Appreciation

0.73% 1.50% 2.12% 2.62% 2.62% 2.50% 2.46% 2.60% 2.50% 2.24% 2.27% 1.97% 1.62% 1.77% 1.99% 1.93% 1.84% 1.68% 1.56% 1.54% 1.61% 1.84% 1.75% 1.61% 1.68% 1.76% 1.53% 1.56% 1.49% 1.47% 1.64% 1.31% 1.41% 1.23% 1.08% 0.74% 0.85% 0.61% 0.57% 0.67% 0.69% 0.89% 0.59% 0.92% 0.54%

House Price Quarterly

Appreciation Annualized

2.93% 5.99% 8.47% 10.48% 10.47% 9.99% 9.86% 10.40% 10.00% 8.95% 9.09% 7.90% 6.47% 7.08% 7.97% 7.73% 7.35% 6.74% 6.24% 6.18% 6.46% 7.37% 7.02% 6.43% 6.73% 7.03% 6.11% 6.22% 5.97% 5.89% 6.55% 5.26% 5.63% 4.93% 4.34% 2.94% 3.40% 2.46% 2.27% 2.67% 2.76% 3.56% 2.35% 3.69% 2.14%

House Price Appreciation From Same

Quarter One Year Earlier

7.14% 9.14% 10.22% 10.59% 10.57% 10.45% 10.17% 9.96% 9.29% 8.35% 7.86% 7.56% 7.52% 7.75% 7.66% 7.20% 6.79% 6.56% 6.72% 6.93% 7.00% 7.07% 6.98% 6.74% 6.68% 6.48% 6.19% 6.30% 6.05% 5.96% 5.71% 5.13% 4.53% 3.96% 3.32% 2.80% 2.73% 2.56% 2.85% 2.87% 3.13% 2.97% 2.72% 2.64% 2.34%

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FHFA Seasonally Adjusted House Price Index for U.S.

Seasonally Adjusted, Purchase-Only HPI

1991Q2 - 2017Q3

Quarter

1995Q1 1994Q4 1994Q3 1994Q2 1994Q1 1993Q4 1993Q3 1993Q2 1993Q1 1992Q4 1992Q3 1992Q2 1992Q1 1991Q4 1991Q3 1991Q2

House Price Quarterly Appreciation

0.65% 0.51% 0.62% 0.85% 0.90% 0.96% 0.74% 1.01% 0.04% 0.79% 0.87% -0.11% 1.18% 0.89% 0.18% 0.01%

House Price Quarterly Appreciation Annualized

2.58% 2.04% 2.50% 3.40% 3.61% 3.85% 2.97% 4.05% 0.15% 3.15% 3.47% -0.45% 4.74% 3.58% 0.72% 0.04%

House Price Appreciation From Same Quarter One Year Earlier

2.66% 2.92% 3.38% 3.50% 3.67% 2.78% 2.60% 2.73% 1.58% 2.75% 2.86% 2.16% 2.28%

Source: FHFA

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