FHFA HPI Registers Two Consecutive Months of Increases

An increase in a Federal Housing Finance Agency housing price index during February marks the first time it has risen two consecutive months since early 2007. The HPI that tracks Fannie Mae and Freddie Mac purchase mortgage transactions rose 0.7% in February and 1% in January. It last saw two consecutive months of increases in March and April of 2007. Prices in the Pacific Coast states rose 3.8% in February where a large proportion of sales involve foreclosed properties and short sales, particularly in California. FHFA senior economist Andrew Leventis said the agency's HPI is picking up a large proportion of distressed sales — contrary to the belief among some economists that the GSE-based index does not include REO sales. In the fourth quarter, "about 50% of our sample for California involved distressed sales," Mr. Leventis said. For the 12 months ending in February, the FHFA HPI was down 6.5%. "The U.S. index is 9.5% below its April 2007 peak," the government-sponsored enterprise regulator said.