FHFA House Price Index: Up 1.8% In April

HPI versus OER

HPI and OER moved in close parallel from the 1991 inception date of the former until early 1999 when the two parted company and HPI began accelerating into the housing bubble. HPI then fell 20.7% over the next 48 months to its March 2007 trough. Confirmation of the "bubble" designation for house prices is the 39.5% spread between HPI and OER in January 2006.

Are we in another housing bubble? The current spread is 44.1%, exceeding the "bubble designation" just mentioned.

Here we compare the Consumer Price Index for All Urban Consumers to both the Nominal and Real House Price Index, which is a similar comparison to what we do in our Case-Shiller update. Nominal HPI growth has clearly taken off since 2012. However, when adjusted for inflation, the House Price Index has not seen a dramatic increase since the late 1990s.

HPI versus OER

Our next update of the FHFA House Price Index will be on July 27.

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