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The Federal Housing Finance Agency's House Price Index showed that house prices increased by 5.4% from the second quarter of 2019 to the second quarter of 2020. Additionally, the index reported that house prices were up 0.9% in June over May on a seasonally adjusted monthly index.
"Home prices grew by 5.4% in the second quarter of 2020 compared to a year ago, despite the impacts of COVID-19," said Lynn Fisher, deputy director of the Division of Research and Statistics at FHFA. "Although house prices fell slightly in May relative to April, in June prices rebounded by 0.9% over the month as local economies re-opened and transactions picked up again. Four census divisions showed strong early summer gains with month-over-month growth of 1% or more in June."
The index also showed that house prices have risen for 36 consecutive quarters and they have risen in all 50 states and the District of Columbia between the second quarters of 2019 and 2020. The top five states with the highest annual appreciation are Idaho (10.8%), Arizona (9.1%), Washington (8.6%), Utah (8.1%) and New Mexico (7.7%). The lowest annual appreciation occurred in West Virginia (1.1%), North Dakota (1.1%), District of Columbia (1.4%), Illinois (2.5%) and Alaska (2.6%).
Austin Niemiec, Quicken Loans Mortgage Services executive vice president, said, “Rising home prices mean brokers should have a laser-like focus on educating first-time homebuyers about what they can afford. While buyers are likely to set their sights too high and stretch their budget, they may also be surprised to learn just how far their budget can take them thanks to today’s low-interest rates boosting their purchasing power.”
House prices rose in 99 of the top 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Urban Honolulu, Hawaii, where prices increased by 11.7%, according to the FHFA's index.