Calculated Risk

37 States and D.C. have seen price declines Seasonally Adjusted

By Bill McBride

Freddie Mac reported that its “National” Home Price Index (FMHPI) declined for the seventh consecutive month on a seasonally adjusted basis in January, putting the National FMHPI down 2.7% from its June 2022 peak, and down 5.3% Not Seasonally Adjusted (NSA) from the peak.

On a year-over-year basis, the National FMHPI was up 2.4% in January, down from 4.4% YoY in December.  The YoY increase peaked at 19.2% in July 2021.

The second graph shows the month-over-month change in the national FMHPI, seasonally adjusted. The index has declined MoM for seven consecutive months.

37 States and D.C. have seen price declines Seasonally Adjusted

In January, 37 states and D.C. were below their 2022 peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peak were in Idaho (-9.6%), Arizona (-8.3%), D.C. (-7.3%), Washington (-7.2%), Nevada (-7.2%), California (-6.6%), Utah (-6.5%), and Colorado (-5.8%).

In January, house prices in 8 states and D.C. were down YoY, led by D.C. (-7.1% YoY, and Idaho (-5.0% YoY).

When will National House Prices be down Year-over-year?

A key advantage of the FMHPI is it is released earlier than the Case-Shiller index. The Case-Shiller released most recently was for December and is a three-month average of closed sales in October, November and December – and this could include contracts signed in August. The FMHPI is for January and includes closed sales and appraisals in January.

Here is a graph comparing the year-over-year change in the Case-Shiller and FMHPI.

Here is a comparison of year-over-year change in the FMHPI, median house prices from the NAR, and the Case-Shiller National index.

The FMHPI and the NAR median prices appear to be leading indicators for Case-Shiller, and based on the recent trend, the FMHPI will be negative year-over-year in March (reported at the end of April) – and Case-Shiller will follow soon after.

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