House Price Index Rises in May

The Federal Housing Finance Agency recently released its monthly House Price Index for May, which found house prices rose 0.4 percent from April to May. This increase comes after U.S. prices fell a total 6.3 percent in the 12 months ending in May. The U.S. index is 19.6 percent below its April 2007 peak.

Freddie Mac recently predicted in its Economic and Housing Market Outlook for July that home sales should grow 3 to 5 percent by the end of the year, indicating this price index increase is part of the growth and possible stabilization of the market.

The Altos Research Mid-Cities report for July was recently released, and found home prices increased for 17 of the 20 markets surveyed. According to the report, the increase in July prices marks a three-month growth period, with Boulder, Colorado; Orlando, Florida; and Boise, Idaho, leading the markets in price increases. Boulder reported the largest one-month increase in median price at 4.58 percent.

According to Altos, the data collected on seven-day trends usually indicate a shift in the housing market. The report showed weekly numbers flattening, which indicates a loss of momentum.

But according to The M Report, Paul Dales, Capital Economics' senior U.S. economist, said, "The recent rise in house prices are nothing more than the normal seasonal uplift triggered by the better weather and the end of the school year." 

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