Home prices rose by almost 1% in July after a 0.7% increase in June, according to the new house price index released by the Federal Housing Finance Agency.
The seasonally adjusted FHFA HPI has now moved in a positive direction for four consecutive months, but compared to a year ago values are down 3.3%.
The sequential trend could bode well for the housing market, but the reading is based solely on mortgages purchased by Fannie Mae and Freddie Mac from their seller/servicers.
With the GSEs tightening underwriting significantly the past three years most of these borrowers have strong credit histories.
Fannie, for instance, acquired and guaranteed $270 billion of single-family loans during the first-half of this year. On these purchases – which exclude acquisitions of delinquent loans from MBS trusts – the average FICO score was 757. And only 23%, or $62 billion, represented purchase money mortgages.
Freddie acquired and guaranteed $158 billion of single-family loans during the same period with an average FICO score of 751. Only 21% ($33.2 billion) were purchase money loans.
A border HPI reading from CoreLogic also shows that home prices have been moving up for several months. However, CoreLogic found that values are down 5.2% from a year ago.
