The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.
The decline in house prices, both regionally and nationally, continues the trend that began in mid-2007 as prices have fallen almost constantly since the peak.
Notably, the FHFA index does not show a "double dip" as can be seen in the Case-Shiller data (shown here), in which prices begin to recover in 2009, but then fall again after mid-2010. The FHFA monthly data shows almost nothing but losses following mid-2007.
The second chart shows each month's house price index compared to the same month a year earlier:
We can note that the Mountain region has performed more poorly (from a seller's perspective) than the national index. This runs contrary to some local experience and some statistics. The Case-Shiller data for the Denver metro area, for example shows that local prices did not decline as much as the national composite index following the financial panic in 2008. Also, the FHFA "expanded-date" index shows Colorado performing better than the national index.
Since we're looking at regional, data, however, we have to keep in mind that this data reflects house prices in Arizona and Nevada, and this no doubt will continue to put downward pressure on regional prices for now.
Nevertheless, the overall trend among most home price indices is one of slow downward movement in home prices. This trend includes Colorado statewide as well as the metro Denver area.
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