U.S. house prices rose in the third quarter of 2011 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 0.2 percent higher on a seasonally adjusted basis in the third quarter than in the second quarter. On an unadjusted basis, prices rose 0.7 percent during the quarter. Over the past year, seasonally adjusted home prices fell 3.7 percent from the third quarter of 2010 to the third quarter of 2011.

FHFA’s seasonally adjusted monthly index for September was up 0.9 percent from its August value. On a not-seasonally adjusted basis, prices were up 0.7 percent during the August to September period. Every census division but the East South Central division showed increases over the same period.

“In most regions of the country, third-quarter home values were relatively stable, even in some areas that experienced sharp price declines in preceding quarters,” said FHFA Principal Economist Andrew Leventis. “While most housing markets still face stiff headwinds, the fact that some beleaguered states—such as Idaho, Florida and Utah—saw quarterly price increases is a positive development.”

While the national, purchase-only house price index fell 3.7 percent from the third quarter of 2010 to the third quarter of 2011, prices of other goods and services rose 4.8 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 8.1 percent over the latest year.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, increased 0.9 percent in the latest quarter but is down 4.3 percent over the four-quarter period.

Significant Findings:

  • The seasonally adjusted purchase-only HPI declined in the third quarter in 21 states and the District of Columbia
  • Of the nine census divisions, the West North Central division experienced the strongest price gains in the latest quarter, posting a 1.5 percent price increase. Prices were weakest in the Pacific census division, where prices fell 0.5 percent.
  • As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Phoenix-Mesa- Glendale, AZ area. That area saw price declines of 10.6 percent between the third quarters of 2010 and 2011. Prices held up best in the Warren-Troy-Farmington Hills, MI metropolitan division, where prices rose 4.0 percent over that period.


This quarter’s Highlights article has two sections. The first section compares recent price trends reported in the purchase-only HPI against price changes computed for the “expandeddata” HPI. The latter, which was described in detail in the 2011Q2 HPI release, is estimated using data from FHA-endorsed mortgages as well as licensed information from county recorder offices. Both indexes show a 0.2 percent price gain in the latest quarter.

The second section analyzes the impact of the recent boom in commodities prices on home values. States and counties with significant mining and oil extraction industries generally experienced more stable house prices than other areas.


FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings on the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 43 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 36 years.

FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Pursuant to the terms of various short-term congressional initiatives, loan limits for mortgages originated between July 1, 2007 and Sept. 30, 2011 were as high as $729,750 in certain high-cost areas in the contiguous United States. Mortgages originated after Sept. 30, 2011 are no longer subject to the terms of those initiatives and, under the formula established by the Housing and Economic Recovery Act of 2008, the highest loan limit for one-unit properties in the contiguous U.S. has fallen to $625,500.