FHFA Home Price Index Shows Weak Growth

Home sales are pivoting higher and appear to be getting a lift from seller discounting. For a second month in a row, the FHFA house price index is up an unusually weak 0.2 percent. The year-on-year rate for June, which had been at 6.0 and 6.3 percent as recently as April and March, is at 5.6 percent in today's report.

In front is the Mountain region, at a year-on-year 8.6 percent, followed by the Pacific at 7.4 percent. New England is weakest at only plus 1.8 percent with the Mid-Atlantic next weakest at 3.2 percent.

Price data in yesterday's new home sales report were also very soft. Concessions are no doubt a plus for future sales but are also a negative for household wealth especially at a time when wage growth is soft.

Recent History Of This Indicator:
Home prices have been very soft which is a negative for household wealth but a positive for sales which have been increasingly solid. The FHFA house price index slowed to only a 0.2 percent gain in June for one of the weakest performances of the economic cycle. Forecasters see July's index coming in only slightly better, at plus 0.3 percent.