Reporting on a two-month lag, the government said home values rose 0.7 percent in November.
National home prices are at their highest point since February 2009.
But before we look too much into the FHFA's Home Price Index, it's important that we're cognizant of its shortcomings; the most important of which is its lack of real-time reporting.
According to the National Association of Realtors™, 80% of purchases close within 60 days. As a result, because of its two-month delay, the Home Price Index report actually trails today's market data by an entire sales cycle.
This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month. The home valuation report is using data from November; the sales reports are using data from December.
The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.
The same is true for the Case-Shiller Index. It, too, operates on a 2-month lag.
All of that said, however, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months. In many markets, home sales are up, home supplies are down, and values have increased. This trend should continue into the early part of 2010, at least.
If you're wondering whether now is a good time to buy a home in Philadelphia , consider low prices, cheap mortgages and an available tax credit as three good incentives. By May, none of them will likely be available.