House prices continue to rebound. The FHFA house price index for May advanced 0.7 percent after gaining 0.5 percent in April. The consensus forecast a 0.8 percent increase. The May HPI change marks the sixteenth consecutive monthly price increase in the purchase-only, seasonally adjusted index. The U.S. index is 11.2 percent below its April 2007 peak.
The May increase was led by the South Atlantic region, increasing 1.8 percent. The weakest was the East South Central region which slipped 1.5 percent. Six of nine Census regions showed gains in the latest month; two declined; and one was flat.
The year-on-year rate for May posted at 7.3 percent, matching the April pace.
Overall, the housing sector continues to make moderate progress. The rise in home prices is favorable for the overall recovery as this will bring more supply to the housing market and add to consumer confidence.
Market Consensus before announcement
The FHFA purchase only house price index for April increased 0.7 percent after improving 1.5 percent in March. The April increase was led by the Mountain region, increasing 2.2 percent. Six of nine Census regions posted gains in the latest month. The year-on-year rate for April stood at 7.4 percent versus 7.5 percent for the month before.