Credit unions have reported low mortgage loan demand so far this year. However, at least a few people are purchasing and financing houses, and paying higher prices for them too, according to data released Tuesday by the Federal Housing Finance Agency.

The FHFA House Price Index rose 0.5% in January, the 23rd out 24 month it did so, a run stretching back to February 2012, the regulator said. Home prices rose 7.4% from January 2013 to January 2014, FHFA also said.

The agency, which regulates Fannie Mae and Freddie Mac, calculated the index value using home sales price information from mortgages either sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The FHFA reported the U.S. home price index is 8.0% below its April 2007 peak; nationally, average home prices are roughly the same as they were back in May 2005.

For the one month of December 2013 to January 2014, the West South Central part of the U.S. saw prices decline by 0.3%, while they rose 1.3% in the Middle Atlantic states.

The 12-month changes were all positive ranging from a gain of 3.2% in the Middle Atlantic states to a 14% price increase in the Pacific region.

Andrew Leventis, principal economist at the FHFA, laid some of the blame for higher prices on tighter inventory in many parts of the country.

“Inventory conditions are tight, to be sure,” Leventis said. “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, in some areas they have not yet risen to the point where they would shake more inventory free.

Investors have purchased many foreclosed or otherwise financially distressed properties and rented them, taking them off the market and further reducing the numbers of available homes.

Leventis said tight inventory could mean lenders will continue to see lower mortgage demand in 2014. However, he cautioned that premise was speculation, not a projection.

NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.