Credit unions and other mortgage lenders have observed slow mortgage demand for some months, but the Federal Housing Finance Agency said prices are on the uptick.
The FHFA House Price Index rose 0.5% in January, the 23rd out 24 months it did so, a run stretching back to February 2012, the agency said.
The FHFA calculates the index value using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac.
The FHFA reported that from January 2013 to January 2014, house prices rose 7.4%, and that the U.S. index is now 8.0% below its April 2007 peak; nationally, homes prices are roughly where they were in May 2005.
From December 2013 to January 2014, the West South Central part of the U.S. saw prices decline 0.3%, while they rose 1.3% in the Mid-Atlantic states. The 12-month changes were all positive, ranging from 3.2% in the Mid-Atlantic states to a14% increase in the Pacific division.
"Inventory conditions are tight, to be sure," said Andrew Leventis, the FHFA's principal economist. "While multiple factors are likely responsible, some of the tightness is attributable to the fact that many homeowners are still underwater on their mortgages and thus would have difficulty selling their homes."
In other words, while prices are rising, they have not yet risen to the point where they would shake more inventory free in some areas.
Credit unions have reacted to the lower mortgage demand in a variety of ways, many by reaching out to local Realtors and streamlining mortgage operations.
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