Boston, MA (MSAD) Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Federal Housing Finance Agency (FHFA) house price index for Boston, MA was released on March 31, 2016. The index showed that home prices in the Boston area increased by 0.4% from the previous quarter, and by 4.7% from the same quarter a year ago. This is the fourth consecutive quarter of positive annual growth for home prices in Boston.

The FHFA house price index is based on sales data from Freddie Mac and Fannie Mae-backed mortgages. The index covers single-family homes with conforming loan amounts, which means that it does not include luxury homes or investment properties.

According to the National Association of Realtors (NAR), the median sales price for existing homes in Massachusetts was $335,000 in February 2016, which is a 5.6% increase from February 2015. The NAR also reports that the number of existing homes sold in Massachusetts decreased by 3% in February 2016 compared to February 2015.

The decrease in sales can be attributed to a lack of inventory of available homes for sale, as well as affordability concerns due to rising prices. According to NAR data, there were only 2 months' worth of inventory available for sale at the end of February 2016, which is down from 3 months' worth at the end of February 2015. This decrease in inventory has likely contributed to the rise in home prices across Massachusetts over the past year.

In addition to tight supply conditions, affordability concerns are also likely playing a role in slowing down sales activity across Massachusetts. According to NAR's affordability index, housing affordability declined slightly in Massachusetts during Q4 2015, and is now at its lowest level since Q3 2008. This decline is due primarily to rising home prices and higher mortgage interest rates over the past year or so.