The Federal Housing Finance Agency's (FHFA) Housing Price Index (HPI) fell in January by 0.6 percent from December figures according to the monthly report issued by FHFA yesterday.  In addition, the December figure was revised downward to reflect a 2.0 percent decline in home prices rather than the 1.6 percent previously reported.

The HPI is calculated using the purchase prices of houses for which Freddie Mac or Fannie Mae guarantee mortgages.  The index is set at 100 based on housing prices in January 1991, and all prices reported here are seasonally adjusted.

In January 2010, the national index stood at 194.0 compared with 195.1 in December.  Across the nine census regions the January index ranges from a low of 170.3 in the East North Central Region (MI, WI, IL, IN, OH) to 230.9 in the Mountain Region (MT, ID, WY, NV, UT, CO, AZ, NM) and the degree of change in January ranged from -1.8 percent in the East North Central to a 2.0 percent increase in the Mountain region.

The index has lost 3.3 percent since January of 2009 when it was 200.7.  The year-over-year change was experienced most strongly in the South Atlantic Region (DE, MD, DC VA, WV, NC, SC, GA, and FL) where the index is down 7.5 percent and the Mountain Region where it has fallen 7.0 percent.  The East North Central region was down 6.9 percent.  Only the Pacific and the West South Central (TX, OK, AR, and LA) Regions improved year-over-year, improving 1.6 percent and 1.0 percent respectively.  During the January 2008-January 2009 period the national index was down 6.7 percent.

Since reaching its peak of 218 in April 0f 2007, the HPI has declined 13.2 percent and is now at levels last seen in October 2004.  It is worth noting, however, that the precipitous downturn in housing prices since early 2007 has really only normalized the market, offsetting the rapid increases experienced since the turn of the century.  The Compound Annual Growth Rate since January, 2000 to the present is now identical to the rate from January 1991 to the present, 3.5 percent.

The estimated December data was revised downward in six of the nine regions as well as nationally.