US House Prices Still Rising After 4 Years On The Up

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US house prices increased by 5.7% in the year to the end of September 2015, according to official figures.

The three-month increase between June and September was 1.3% – and saw home values increase for 17 quarters in a row.

Housing experts were expecting a slowdown in the market.

“Prices did not stand still or fall as many expected,” said economist Andrew Leventis, of the Federal Housing Finance Agency (FHFA), the body producing the statistics.

“The same drivers are in place now that have been pushing the market up for the past four years.

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“They are low interest rates, a lack of supply, strong buyer confidence and increasing salaries making homes more affordable.”

What are Fannie Mae and Freddie Mac?

The FHFA calculates the house price index from mortgages backed by the government agencies Fannie Mae and Freddie Mac.

Fannie Mae provides mortgages to home buyers with credit problems

Freddie Mac also provides mortgages but also helps renters with finding a home

The organisations are the largest mortgage funding bodies in the USA and represent a significant number of mortgages taken out for house purchases.

Highest and lowest price growth

The report confirmed house prices went up in every state except West Virginia.

The five states with the highest price growth were:

  • District of Columbia – 15.4%
  • Colorado – 12.7%
  • Nevada – 12.4%
  • Oregon – 10.0%
  • Florida – 10.0%

The five states with the lowest growth were:

  • Hawaii – 2.4%
  • New Jersey – 2.2%
  • Maine – 1.78%
  • Connecticut – 1.10
  • West Virginia – -0.08%

Of the 100 most populated metropolitan areas, the highest increase was in North Port-Sarasota-Bradenton, Florida, where home prices were up 16.1%. The lowest was El Paso, Texas, where prices dropped 3.6%.

Mortgage rates from Fannie Mae and Freddie Mac range from 3.95% for a 30 year fixed rate to 3.01% fixed for the first five years and then reverting to a variable rate.

The FHFA report offers a set of comprehensive national and state house price statistics

The next FHFA house price report is expected in early February.

“The US housing market looks in good health but there is a big difference in housing markets in different states and regions,” said The Economist magazine.

“San Francisco prices are higher than their pre-crash 2005 peak, while those in Las Vegas have increased at the same rate but are 40% below their peak.”

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