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U.S. Housing Price Gains Above 2005 Bubble Peak, May Have Topped

Monthly price gains for both S&P Case-Shiller, FHFA recently above 2005 peaks, Case-Shiller may have topped, while FHFA prices remain above pre-bubble trend.

• Monthly gains for both indexes reached record in March:

• Case-Shiller 1.9% M/m vs 2005 peak 1.7%

• FHFA purchase-only index record 1.5%; 2005 peak 1.1%

• While Case-Shiller shows signs of having topped, upward trend for FHFA price levels remains intact

• FHFA index 18% above 1992-1997 trend; even at Mar. 2011 trough, index was 10% above trend

• NOTE: Significant steepening in FHFA price gains from 1998 reflects government policies to promote affordable housing, repeal of Glass-Steagall legislation, and tax changes that favored housing over other assets

• Case-Shiller 20 City index may lead FHFA, as is focused on 20 largest cities and includes new homes sales prices only, likely to be first hit by any pull-back, is value weighted, which skews data higher

• FHFA includes all 50 states and is based on existing home sales prices, limited to conforming FNMA, FHLMC mortgages