Mountain states led home price growth for 4 years

Following 40 straight quarters of annual growth, nationwide housing prices spiked to the highest level since the Federal Housing Finance Agency started its tracking in 1991.

Single-family property values jumped in the second quarter by 17.42% annually, 4.92% quarterly and 1.6% in June from May, according to the agency’s Home Price Index. Additionally, overall price growth totaled 47.66% and 232.71% over the past five years and 30 years, respectively.

Broken down by the nine census divisions and the 100 largest metro areas, yearly gains in the Mountain, New England, and Pacific geographies and the top 20 cities surpassed the average growth for the record-setting quarter, shooting above 20%, FHFA Deputy Director of Research and Statistics Lynn Fisher said in the report.

The Mountain region — Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming — led the country, with the most price growth in each time frame analyzed. HPI values in the region surged quarterly at 6.82%, annually at 22.91%, five years at 66.42% and 383% since the first quarter of 1991. It also paced the country in annual gains for 15 straight quarters. New England — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont — grew 5.59% quarterly, 20.37% annually, 46.81% from five years ago and 213.22% since 1Q 1991. The Pacific division — Alaska, California, Hawaii, Oregon and Washington — followed with gains of 5.95%, 20.13%, 54.75% and 296.71%.

Meanwhile, the West North Central — Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota — had the lowest appreciation at 4.29%, 14.9%, 42.13% and 222.22%. The region finished just above the West South Central — Arkansas, Louisiana, Oklahoma, Texas — gains of 4.42%, 14.98%, 40.48% and 239.35%.

The extremely tight supply of for-sale homes continues to drive prices skyward. If the typical seasonal decline in listings from summer to fall holds, price growth could stay on the same trajectory, according to Finance of America Mortgage President Bill Dallas.

“Housing inventory is down in nearly every major market, with some cities seeing more than a 40% decrease in active inventory when compared to the same month last year,” Dallas said in a statement.

“The strength of the housing market far outweighs any softening that may result from the foreclosure moratorium expiring or the end of the eviction ban, and any new inventory will likely be eaten up by those already in the market for a home,” he wrote.

At the state level, Idaho led with a 37.06% jump from the second quarter of 2020. Utah’s 28.26%, Arizona’s 23.91%, Montana’s 23.73% and Rhode Island’s 23.66% rounded out the top five. On the flip side, Alaska posted the lowest annual gain of 8.17%, followed by 8.66% in North Dakota, 9.57% in Louisiana, 11.43% in Mississippi and 11.54% in Iowa.

Boise, Idaho, sat atop the list of metros with a 41.11% yearly change in the second quarter. Austin, Texas, came second with a 35.15% rate, trailed by 26.18% in Salt Lake City, 25.5% in Cape Coral, Fla., and 24.6% in Stockton, Calif. Only three of the top 100 metros recorded single-digit annual growth, with 4.555 in San Francisco, 8.9% in Baton Rouge, La., and 8.93% in Houston.