Uncategorized December 8, 2020

Q3 2020 FHFA HPI update

Hope everyone had a fabulous Thanksgiving! This month I wanted to share the latest FHFA Third Quarter data for their House Price Index (HPI) and also the new conforming loan limits for 2021.

From the HPI report:

U.S. house prices rose 7.8 percent from the third quarter of 2019 to the third quarter of 2020 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 3.1 percent in the third quarter of 2020. FHFA’s seasonally adjusted monthly index for September was up 1.7 percent from August.

“House prices recorded their strongest quarterly gain in the history of the FHFA HPI purchase-only series in the third quarter of 2020,” said Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “Relative to a year ago, prices were up 7.8 percent during the quarter – the fastest year-over-year rate of appreciation since 2006. Monthly data indicate that prices continued to accelerate during the quarter, reaching 9.1 percent in September, as demand continues to outpace the supply of homes available for sale.”

Significant Findings

  • House prices have risen for 37 consecutive quarters, or since September 2011.
  • House prices rose in all 50 states and the District of Columbia between the third quarters of 2019 and 2020. The top five areas in annual appreciation were: 1) Idaho 14.4 percent; 2) Arizona 11.1 percent; 3) Washington 10.8 percent; 4) Utah 10.7 percent; and 5) Tennessee 10.0 percent. Idaho has been the leading state for the last 8 quarters. The areas showing the lowest annual appreciation were: 1) North Dakota 4.0 percent; 2) Iowa 4.7 percent; 3) Louisiana 4.8 percent; 4) Alaska 4.9 percent; and 5) Hawaii 5.2 percent.
  • House prices rose in all the top 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Boise City, ID, where prices increased by 16.4 percent. Prices were weakest in Baton Rouge, LA, where they increased by 2.1 percent.
  • Of the nine census divisions, the Mountain division experienced the strongest four quarter appreciation, posting a 9.6 percent gain between the third quarters of 2019 and 2020 and a 3.8 percent increase in the third quarter of 2020. The Mountain division has been the leading region for 12 consecutive quarters. Annual house price appreciation was weakest in the West South Central division, where prices rose by 6.5 percent between the third quarters of 2019 and 2020.

Here’s a look at how these numbers played out for our local areas. Boulder, still the tops for annual appreciation since 1991, but our short-term appreciation has decelerated recently which isn’t necessarily a bad thing. Interesting that the Denver MSA is doing better than Boulder on a short-term basis. I’ve heard and agree that Boulder County is starting to catch demand slopping over from the Denver metro area, an interesting reversal from past patterns.

Here is a graph comparing the annual appreciation rates for the Boulder MSA (all of Boulder County), the Denver MSA (the City and County of Denver, Arapahoe County, Jefferson County, Adams County, Douglas County, the City and County of Broomfield, Elbert County, Park County, Clear Creek County, and Gilpin County) and the US.

Two last charts. Map of new confirming loan limits in January 2021. Interesting to see this graphically and where the high cost areas are!

                   

The national map color coded by appreciation over the preceding 12 months.