This morning the FHFA released their House Price Index for August 2009. They showed an decrease from July to August of 0.3%. The previously reported increase of 0.3% from June to July was unchanged. That means that the downward revision I had expected did not happen. As I showed in my earlier post, the initial estimate of monthly house price growth had been biased up by 0.22%, so i expected that the initial 0.3% growth from June to July could be revised down. This did not happen.
As I show in figure one, since December 2008, nominal house prices have risen 0.2%. Also shown in figure one, just using the headline initial monthly estimate we would believe that house prices have risen 2.6%, an overstatement of 2.4%. Using the August report, the initial monthly index for the house price index is on average biased up by 0.21%, a slight improvement over the previously found estimate of 0.22% using the July report.
Also included in the FHFA's August report, they now state that house prices are now 10.7% below their April 2007 peak. The latest fall in house prices is a bit surprising, but month to month numbers do not provide much information. Next month we will receive the report for the third quarter of 2009--that will contain a lot more accurate information.