FHFA Home Price Index Gains Slightly, At Low End Of Expectations

Price data in yesterday's existing home sales report showed an uptick but not today's FHFA house price index which managed only a 0.2 percent gain in May to come in on the low end of Econoday's consensus range. Year-on-year the index is still solid at 6.4 percent though this reading is down 2 tenths from April for the lowest showing since January last year. And the monthly trend for this report has clearly shifted lower, posting 0.9 percent gains early in the year followed by a 0.1 percent gain in March and 0.2 percent gains in both March and April.

Regional data show cooling conditions in the West where double-digit price bubbles were a concern early in the year with the Mountain states at 9.1 percent yearly price growth in May and the Pacific at 7.6 percent. The Mid-Atlantic remains the weakest region though price growth is still a very solid 5.0 percent.

Though yearly rates are still healthy, they are bound to move lower if monthly rates remain flat. There has not been much punch at all in the nation's housing data during this year's Spring selling season, a negative not only for the nation's home sellers and Realtors but also for second-quarter residential investment. Watch next week for Case-Shiller data which has likewise been weak.