FHFA House Price Index Shoots Up

Yesterday Federal Reserve Chair Jerome Powell said there was no risk of excess value in the housing market but today's FHFA data do hint at unusual acceleration. The house price index shot up a far stronger-than-expected 0.8 percent in data for January with the year-on-year rate jumping 6 tenths from an upwardly revised December and hitting a 3-1/2 year high at 7.3 percent.

Questions of a possible bubble are centered in the western states with the Mountain region in this dataset at a year-on-year 10.0 percent and the Pacific region at 9.4 percent. Yet three other regions are 7 percent and over: South Atlantic up 7.8 percent, New England up 7.1 percent, and the East North Central at 7.0 percent.

Low supply of homes on the market is a key factor giving prices a boost though strength in the labor market and high levels of consumer confidence are also at work. Watch tomorrow for new home sales and related price data followed on Tuesday next week with the Case-Shiller report where expectations, following today's FHFA report, are very likely to move higher.