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Analyzing the effects of last week's important indicators on ETFs

Part 4
Analyzing the effects of last week's important indicators on ETFs (Part 4 of 10)

Must-know: Why is growth in US house prices slowing?

Key housing releases

Recent releases from the Federal Housing Finance Agency (the FHFA) House Price Index (or HPI) suggested another quarterly appreciation in U.S. home prices, which rose 1.2% on a seasonally adjusted basis, marking the tenth consecutive quarterly increase.

FHFA principal economist Andrew Leventis said:

“Home price appreciation in the fourth quarter was considerable, but more modest than in recent periods”. He further added that “It is too early to know whether the lower quarterly growth rate represents the beginning of more normalized price appreciation patterns or a more significant slowdown.”

FHFA Homes Appreciation RatesEnlarge Graph

FHFA HPI measures the movement of single-family house prices. It serves as a timely, accurate indicator of house price trends at various geographic levels. Economists use this indicator to predict changes in the rates of mortgage defaults, prepayments, and housing affordability in specific geographic areas. The HPI is published by the Federal Housing Finance Agency using data provided by Fannie Mae and Freddie Mac.

Home prices surged in the major 38 states within the U.S., of which five states particularly rose. Learn more in the next part of this series.

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