WASHINGTON (2/26/14)--House prices rose 1.2% in the fourth quarter of 2013--the 10th consecutive quarterly increase in the index tracked by the Federal Housing Finance Agency (FHFA).
"Home price appreciation in the fourth quarter was considerable, but more modest than in recent periods," said Principal Economist Andrew Leventis in the FHFA's report on the purchase-only, seasonally adjusted index.
According to numbers released Tuesday, house prices rose 7.7% from the fourth quarter of 2012 to 2013's fourth quarter. The monthly U.S. purchase-only index came in at 208.3 for December, up by 0.8% from the revised November level of 206.7.
The boost in house prices for 10 quarters has stirred some concern about an overheating market, according to Moody's analysts (Economy.com Feb. 25). "The possibility of overheating is caused by an undersupplied market, not by a mortgage lending bubble," Moody's noted.
Mortgage lending is of high quality with the share of Fannie Mae and Freddie Mac mortgages financing distressed sales falling by half or more in three-quarters of the areas covered over the last year.
Many U.S. metropolitan markets are substantially undervalued, foreclosure inventories are at their lowest level since early 2008, and single-family construction has not caught up with demand, analysts said.