February 27, 2018

FHFA: U.S. House Prices Rise 1.6 Percent in Fourth Quarter 2017

U.S. house prices rose 1.6 percent in the fourth quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).   House prices rose 6.7 percent from the fourth quarter of 2016 to the fourth quarter of 2017.  FHFA’s seasonally adjusted monthly index for December was up 0.3 percent from November.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

“Home price appreciation in the fourth quarter showed absolutely no letup throughout the U.S.,” said Dr. Andrew Leventis, Deputy Chief Economist.  “As we begin to evaluate home prices in the first quarter, we will monitor whether new headwinds—higher mortgage rates and changes in tax laws—will lead to any moderation in the rate of house price growth.”

See video of highlights for the fourth quarter featuring Dr. Leventis.

Significant Findings

  • Home prices rose in 49 states (Mississippi is the exception) and the District of Columbia between the fourth quarter of 2016 and the fourth quarter of 2017.  The top five areas in annual appreciation were:  1) District of Columbia 14.3 percent; 2) Washington12.0 percent; 3) Idaho 11.5 percent; 4) Nevada 11.5 percent; and 5) Utah 10.7 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 15.0 percent.  Prices were weakest in San Francisco-Redwood City-South San Francisco, CA (MSAD), where they rose 0.5 percent.
  • Of the nine census divisions, the Mountain division experienced the strongest four-quarter appreciation, posting an 8.8 percent gain between the fourth quarters of 2016 and 2017 and a 2.3 percent increase in the fourth quarter of 2017.  Annual house price appreciation was weakest in the Middle Atlantic division, where prices rose 5.3 percent between the fourth quarters of 2016 and 2017.

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 short-term differences can be significant.


FHFA’s HPI tracks changes in home values for individual properties owned or guaranteed by Fannie Mae or Freddie Mac over the past 42 years using more than eight million repeat transactions.   The “repeat-transactions” methodology constructs index estimates by statistically evaluating price appreciation (or depreciation) for homes with multiple values over time.  See this video explaining the basic methodology behind the FHFA HPI.


  • See page 23 for Frequently Asked Questions about the FHFA HPI.
  • The next monthly HPI report (including data through January 2018) will be released March 22, 2018 and the next quarterly HPI report (including data for the first quarter of 2018) will be released May 24, 2018.
This post was originally published here.