First American’s proprietary Real House Price Index (RHPI) looks at February 2017 data and includes analysis from First American Chief Economist Mark Fleming on the impact of under-supplied markets on real house prices.

“Real, purchasing-power adjusted house prices increased 11 percent in February compared to a year ago. The lack of homes listed for sale is causing unadjusted house price growth to remain strong. Additionally, increasing interest rates are reducing consumer purchasing power. The result is a substantial year-over-year increase in the real price of homes,” said Mark Fleming, chief economist at First American.

For Mark’s full analysis on affordability, the top five states and markets with the greatest increases and decreases in real house prices, and more, please visit the Real House Price Index.

The RHPI offers an alternative view of the change over time of house prices at the national, state and metropolitan area level. The traditional perspective on house prices is fixated on the actual prices and the changes in those prices, which overlooks what really matters to potential buyers - their purchasing power, or how much they can afford to buy. The RHPI adjusts prices for purchasing power by considering how income levels and interest rates influence the amount one can borrow.

The RHPI is updated monthly with new data. Look for the next edition of the RHPI the week of May 29, 2017.

“Combined with unfaltering demand, the lack of supply continues to pressure unadjusted prices higher in one of the strongest spring sellers’ markets seen in recent memory.”