Despite disappointing home sales in the first quarter of the year as winter storms took their toll, home prices increased 1.3 percent over the first three months of the year on a seasonally-adjusted basis for the purchase-only market, according to the Federal Housing Finance Agency (FHFA).
“Although the first quarter saw relatively weak real estate transaction activity—in part due to seasonal factors—home prices continued to push higher in the first quarter,” said Andrew Leventis, principal economist for FHFA, with the release of the agency’s House Price Index.
Leventis cites the “modest inventories of homes available for sale” as a major factor in the first-quarter increase.
While the rose 1.3 percent over the quarter, first-quarter prices were 6.6 percent higher than prices recorded in the first quarter of last year, according to FHFA. This compares to just 0.8 percent growth in the price of other goods and services.
When adjusted for inflation, first-quarter home prices are 5.7 percent higher than they were one year ago.
Home prices rose in 42 states and the District of Columbia over the first quarter of the year.
On an annual basis, only one state posted a price decline over the year in March—Vermont, with a 1.24 percent decline.
Nevada ranked highest for annual price appreciation in March, with a 20.96 percent rise. The District of Columbia (19.78 percent) ranked second, followed by California (15.78 percent), Arizona (14.72 percent), and Florida (10.65 percent).
Among the nine Census divisions, FHFA noted “substantive decelerations” in prices over the past year in the two divisions that posted the greatest price gains over the previous year.
In the Pacific division, prices increased 12.4 percent over the year in March after posting a 15.8 percent gain over the year in March 2013.
In the Mountain division, prices increased 9.8 percent over the year in March, down from a 14 percent gain a year earlier.
The smallest price gain was recorded in the Middle Atlantic division, where prices rose 2 percent. This price gain matches that of a year ago. No division posted a decline in prices over the year in March.
Of the 100 largest metropolitan areas, the Charleston metro posted the greatest price gain compared to last year’s first quarter: 10.7 percent.
The lowest price increase took place in the New Orleans metro area, where prices declined 2.6 percent over the year.
FHFA also tracks “distress-free” home prices in 12 large metros, which excludes sales of bank-owned properties and short sales. In nine of the 12, the distress-free index reported lower price appreciation than the traditional purchase-only indexes.
The agency’s index came out the same day as the Case-Shiller Home Price Indices, which showed prices up 12.4 percent in 20 of the nation’s biggest markets—a slight cut from a 12.9 percent increase recorded in February.