In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the FHFA price index and mortgage applications.

• Home prices rose 0.6 percent from October to November and 5.6 percent for the 12 months ending in November 2012, according to the Federal Housing Finance Agency (FHFA). In the same period, prices reported by NAR rose 9.4 percent.
• NAR reports the median price of all homes that have sold while FHFA reports the results of a weighted repeat-sales index. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
• FHFA reports show that price gains for the year were strongest in the Pacific and Mountain Census divisions and weakest in the New England and Middle Atlantic divisions.
• Mortgage application data out today also show a trend of increasing prices. Since August 2012, year-over-year change in average purchase application loan size has exceeded 10 percent in all but three weeks.
• Mortgage application data from the mortgage bankers show that applications are up in the week of January 18 for both refinances and purchases. Both purchase and refinance applications are up compared to one year ago as well, and could be an indicator of a strong housing market this spring and continued price growth given strong demand and relatively low inventories.