U.S. House Prices Climb, But Remain Below Their Pre-Recession Peak

Nationally, house prices continued to rise in the first month of 2013, contributing to the overall recovery in U.S. house prices. According to the most recent release by the Federal Housing Finance Agency, U.S. house prices rose by 0.6% on a month-over-month seasonally adjusted basis in January. This is the twelfth consecutive monthly increase for the index. Over this twelve month period, house prices have risen by 6.5%

The Census Bureau uses divisions to segment the four major regions of the country; Northeast, Midwest, South, and West. As Chart 1 illustrates, the recovery in house prices is occurring in every division of the country. However, the contribution of January house prices to the recovery in each division varied. January house prices in divisions such as West South Central, West North Central, South Atlantic, Pacific, and Mountain, and East North Central added to the overall recovery already occurring in those divisions. Conversely, house prices in New England, Middle Atlantic, and East South Central subtracted from the general recovery already underway in those regions. However, these monthly declines were comparatively small.Presentation1

While a recovery is taking place across the U.S., house prices in most divisions remain below their pre-recession peak. Only house prices in the West South Central area of the country, which includes Texas, Arkansas, Oklahoma, and Louisiana, have surpassed their pre-recession high. Previous research showed that there is a tendency for the areas where house prices declined the most to have strong rebounds. However, despite the stronger recovery experienced by these divisions, their house prices remain significantly below their peak. As Chart 2 illustrates, house prices in the Pacific, the South Atlantic, and the Mountain divisions, regions of the country that have experienced the greatest price increases, are furthest from their pre-recession high. These three divisions include the states where the house price bubbles and subsequent declines were the largest: California, Arizona, Nevada and Florida.

For full histories of the FHFA US and 9 Census divisions, click here. Presentation2

Advertisements

5 Responses to U.S. House Prices Climb, But Remain Below Their Pre-Recession Peak

  1. […] In a previous post it was noted that despite recent growth, house prices in the West have not reached the peak level experienced during the housing boom. However, comparing current house prices to this level may not be the best indicator of whether house prices in Phoenix have normalized. According to Chart 3, Phoenix house prices began to climb rapidly during the boom, before falling sharply. In the three years prior to this January 2004-June 2006 period, growth of Phoenix house prices mirrored the house price trends of Denver and Dallas, cities which experienced much smaller house price appreciation during the boom period and are closest to regaining their peak levels. Denver is 4.4% from its peak and Dallas is 4.7% below its high. After a steep decline, the trend of house prices in Phoenix has returned to a pace that is nearly similar to the trend of house prices in Denver and Dallas. Moreover, although house prices in Phoenix have experienced strong growth in recent months, its trend continues to remain at a level roughly on par with these two cities. […]

  2. […] In a previous post it was noted that despite recent growth, house prices in the West have not reached the peak level experienced during the housing boom. However, comparing current house prices to this level may not be the best indicator of whether house prices in Phoenix have normalized. According to Chart 3, Phoenix house prices began to climb rapidly during the boom, before falling sharply. In the three years prior to this January 2004-June 2006 period, growth of Phoenix house prices mirrored the house price trends of Denver and Dallas, cities which experienced much smaller house price appreciation during the boom period and are closest to regaining their peak levels. Denver is 4.4% from its peak and Dallas is 4.7% below its high. After a steep decline, the trend of house prices in Phoenix has returned to a pace that is nearly similar to the trend of house prices in Denver and Dallas. Moreover, although house prices in Phoenix have experienced strong growth in recent months, its trend continues to remain at a level roughly on par with these two cities. […]

  3. […] In a previous post it was noted that despite recent growth, house prices in the West have not reached the peak level experienced during the housing boom. However, comparing current house prices to this level may not be the best indicator of whether house prices in Phoenix have normalized. According to Chart 3, Phoenix house prices began to climb rapidly during the boom, before falling sharply. In the three years prior to this January 2004-June 2006 period, growth of Phoenix house prices mirrored the house price trends of Denver and Dallas, cities which experienced much smaller house price appreciation during the boom period and are closest to regaining their peak levels. Denver is 4.4% from its peak and Dallas is 4.7% below its high. After a steep decline, the trend of house prices in Phoenix has returned to a pace that is nearly similar to the trend of house prices in Denver and Dallas. Moreover, although house prices in Phoenix have experienced strong growth in recent months, its trend continues to remain at a level roughly on par with these two cities. […]

  4. […] However, recent price growth may be helping to add inventory to the existing home market. The Case-Shiller 20-city index measure of house prices was up 8.1% year over year for the January report. Likewise, the Federal Housing Finance Agency reported national home prices were up 6.5% from January 2012 to J…. […]

  5. […] In a previous post it was noted that despite recent growth, house prices in the West have not reached the peak level experienced during the housing boom. However, comparing current house prices to this level may not be the best indicator of whether house prices in Phoenix have normalized. According to Chart 3, Phoenix house prices began to climb rapidly during the boom, before falling sharply. In the three years prior to this January 2004-June 2006 period, growth of Phoenix house prices mirrored the house price trends of Denver and Dallas, cities which experienced much smaller house price appreciation during the boom period and are closest to regaining their peak levels. Denver is 4.4% from its peak and Dallas is 4.7% below its high. After a steep decline, the trend of house prices in Phoenix has returned to a pace that is nearly similar to the trend of house prices in Denver and Dallas. Moreover, although house prices in Phoenix have experienced strong growth in recent months, its trend continues to remain at a level roughly on par with these two cities. […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: