FHFA House Price Index Shows Weakest Performance Since August 2015

Home sales have been on the rise and price concessions are likely part of the reason. The FHFA house price index rose only 0.2 percent in May for the weakest performance since August last year and one of the weakest of the whole recovery. The year-on-year rate is likewise sagging at recovery lows, at plus 5.6 percent for a 3 tenths dip from April.

New England is among the weakest regions, down 1.3 percent in the month with a year-on-year gain of only 3.9 percent. The Pacific and Mountain regions are the strongest, the former down slightly in the month but up 7.9 percent on the year with the latter up 1.2 percent in the month for an 8.5 percent year-on-year gain.

But gains aren't the theme of the May FHFA report, one if followed by similar weakness in next week's Case-Shiller data could lower what had been a moderately positive outlook for home-price appreciation, where for household wealth strength is necessary to offset weakness in wage growth and low interest on savings.

Recent History Of This Indicator:
FHFA house price index broke lower in April, slowing to a 0.2 percent gain. A 0.4 percent gain is expected for June, one however that would still be on the soft side for this reading. Year-on-year, the rate has been struggling to hold at the 6.0 percent line, slipping 3 tenths in April to what is still a very respectable 5.9 percent. Home-price appreciation is of special importance in a low inflation, low wage growth economy.