Economy Watch: FHFA Home Price Index, Fed’s Coincident Indexes
- Oct 24, 2014
U.S. house prices saw an unusually strong uptick in August compared with July, according to the Federal Housing Finance Agency monthly House Price Index, which was released on Thursday. The index gained 0.5 percent from the previous month. The previously reported 0.1 percent monthly increase in July was revised to reflect a 0.2 percent increase compared with June.
The FHFA’s index is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. From August 2013 to August 2014, house prices were up 4.8 percent. The index is 5.8 percent below its April 2007 peak and is roughly the same as during August 2005. This is the ninth consecutive monthly house price increase.
For the nine census divisions, monthly price changes from July to August ranged from down 0.6 percent in the New England and South Atlantic divisions, to up 1.2 percent in the Mountain division. The 12-month changes were all positive, ranging from up 1.9 percent in the Middle Atlantic division to up 7.8 percent in the Pacific division.
Fed’s Coincident Indexes Up in Most States
The Federal Reserve Bank of Philadelphia released coincident indexes for the 50 states for September on Thursday. Compared with August, the indexes increased in 43 states, decreased in four, and remained stable in three. Over the past three months, the indexes increased in 44 states, decreased in five, and remained stable in one.
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic, according to the Philly Fed. The four state-level variables in each coincident index are nonfarm payroll employment; average hours worked in manufacturing; the unemployment rate; and wages and salaries. The trend for each state’s index is set to the trend of its gross domestic product, so long-term growth in the state’s index matches long-term growth in its GDP.
Separately, the U.S. Department of Labor reported on Thursday that during the week ending Oct. 18, initial unemployment claims were 283,000, an increase of 17,000 from the previous week. The previous week’s level was revised up by 2,000 from 264,000 to 266,000. The four-week moving average was 281,000, a decrease of 3,000 from the previous week’s revised average, and the lowest level for this metric since May 6.
Wall Street seems to be in a yo-yo mood lately, bouncing up again on Thursday after a down day, up days, down days, and so on. The Dow Jones Industrial Average gained 216.58 points, or 1.32 percent, while the S&P 500 and the Nasdaq advanced 1.23 percent and 1.6 percent, respectively.