According to a report by the Federal Housing Finance Agency, U.S. house prices increased in the first quarter of 2012 showing slight improvement for the housing market. However, a surge in market growth is not expected for the remainder of the year as economic activity continues to improve at a slow pace as well.
The FHFA's House Price Index (HPI) data reports that on a seasonally adjusted basis, housing prices increased 0.6 percent for the first quarter. A further detailed breakdown shows that on a month-to-month basis, the index was up 1.8 percent for the month of March. The index also recorded a 0.5 percent increase for the one year interval March 2011 to March 2012.
FHFA principal economist Andrew Leventis said the report falls in line with similar data from other real estate groups.
“Consistent with other housing market indicators, the FHFA HPI showed stronger house prices
in the first quarter, most notably in March. Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices,” said Leventis.
While prices rise, the nation's housing inventory is shrinking. According to RE/MAX's National Housing Report. Inventory of homes for sale fell 3.7 percent in April. The market's inventory was also 25.6 percent lower than market inventory one year ago in April. Further measurements of inventory reported a 5.3-month market supply below the 6-month mark, which is an indication of a healthy supply.
Further economic data on the economy's recovery shows the Consumer Price Index for the first quarter gained 2.5 percent. Real GDP for the quarter gained only 2.2 percent, below the 3.0 percent increase from the previous quarter but better than three of the past four quarters. These indications show slow growth in the economy.
Other housing market indexes showed less improvement in the market for the first quarter. The Freddie Mac House Price Index (FMHPI) showed slightly weaker signs of home price improvement in the market for the first quarter. The FMHPI showed a 0.3 percent decrease. The S&P/Case-Shiller Home Price Index showed a decrease of 2 percent for the first quarter.
As slight improvement in housing markets prices are beginning to show there are positive signs for 2012 and 2013. With slowly improving economic indicators for the U.S. market, however, the housing market is not expected to see a surge in growth as it continues to keep with the pace of the U.S. recovery overall.
