Home prices rose 12.6 percent in the first quarter of 2021, according to the Federal Housing Finance Agency House Price Index released Tuesday. The number is also up 3.5 from the last quarter and 1.4 percent from the previous month.
The nationwide housing shortage and record-low mortgage rates are creating an ultra-competitive market in which many more want to buy a home than there are available on the market. Idaho, Utah, Arizona, New Hampshire and Connecticut were the states with the highest overall growth while Boise, where prices rose by 28.2 percent, was the city with the highest increases.
Honolulu, where travel was heavily curbed by the COVID-19 pandemic in 2020, saw the weakest growth — its home prices dropped by 0.7 percent.
“House price growth over the prior year clocked in at more than twice the rate of growth observed in the first quarter of 2020, just before the effects of the pandemic were felt in housing markets,” Dr. Lynn Fisher, deputy director of FHFA’s Division of Research and Statistics, said in a statement. “In March, rates of appreciation continued to climb, exceeding 15 percent over the year in the Pacific, Mountain and New England census divisions.”
Out of the nine geographical regions in the country, the Mountain region that includes states including Idaho and Nevada saw the highest growth at 15.7 percent growth between the first quarters of 2020 and 2021 while the West South Central, which includes Oklahoma, Louisiana and parts of Texas, saw only 11.1 percent growth in the same time period.
The FHFA states that the HPI is is calculated based on “a weighted, repeat-sales statistical technique to analyze house price transaction data” using “seasonally adjusted, purchase-only data from Fannie Mae and Freddie Mac.”