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The all-transactions House Price Index (HPI), which includes data from mortgages used for
both home purchases and refinancings, fell for the U.S. overall during the latest quarter (2nd quarter 2010).
The national index declined 0.54 percent in 2010q2 and 4.95 percent over the four-quarter period 2009q2 to 2010q2.
Among metros, the Bend, OR MSA had the largest the four-quarter period 2009q2 to 2010q2 HPI percent decline -- an 18.59 percent decrease,
a slight improvement from the previous four quarter HPI change -- 23 percent decrease, yet it continued to decrease.
348 metros of 384 (metros for which HPI is computed) experienced a four-quarter period 2009q2 to 2010q2 HPI decline;
with only 35 metros experiencing an increase. Metros with highest four-quarter HPI percent change were Lawton, OK (4.94) and Ithaca, NY (3.15).
Use the ranking table presented below to examine states and metros of interest.
About the Housing Price Index
The Housing Price Index (HPI) is a broad measure of the movement of single-family house prices.
It serves as a timely, accurate indicator of house price trends at various geographic levels.
It also provides housing economists with an analytical tool that is useful for estimating changes in the rates of mortgage defaults,
prepayments and housing affordability in specific geographic areas.
The HPI is a measure designed to capture changes in the value of single-family houses in the U.S. as a whole,
in various regions and in smaller areas. The HPI is published by the Federal Housing Finance Agency (FHFA) using data provided by Fannie Mae and Freddie Mac.
Additional details below ranking table.
Situation & Outlook ... assessing where we are and what's ahead
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Situation & Outlook
Proximity uses the HPI in several ways that assist analysts and decision-makers.
The ranking table provided below is updated quarterly as new HPI data are released.
The ranking table provides an easy way to rank/compare housing prices for a single metro area
or a group of metros.
Second, the HPI alone provides only insights based on this one measure.
Evaluation of housing markets, and the regional economy, trends and patterns need to use the HPI in combination
with many other measures.
Proximity integrates the HPI data into Situation & Outlook.
The metro HPI is updated quarterly.
HPI release dates are shown in the Integrated Calendar.
Quarterly Update. The ranking table shows the latest quarterly HPI data, through 2nd quarter 2010.
This table will be updated on November 24th with 3nd quarter 2010 data and
related prior quarterly estimates and re-computed quarterly change values.
Differences in State versus Metro HPI Values
Comparing HPI values in the above table for states versus metros shows that states HPI values that are much larger
than metro HPI values. The reason for this is that state indexes have a base of 100 for 1980Q1,
whereas metro indexes have a base of 100 for 1995Q1. While the indexes can be re-based, the data are presented here just as estimated
by FHFA. For more information regarding HPI re-basing and analysis, contact Proximity.
Different bases have no impact on the percent change measures, as shown in the table, which will typically be of most interest.
The graphics in the expanding sections below illustrate the differences between using the same versus different base years
for the State of Arizona and Arizona metros.
State & Metro Different Bases -- chart
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More About the HPI
The HPI is a measure designed to capture changes in the value of
single-family homes in the U.S. by state and metropolitan area.
The HPI equals 100 for all MSAs in the first quarter of 1995.
States and divisions are normalized to 100 in the first quarter of 1980.
The difference in normalization dates has no impact on appreciation rates obtained from the index.
HPI data are estimates subject to errors of estimation.
Transactions Covered by HPI
The House Price Index is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
Only mortgage transactions on single-family properties are included.
Conforming refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and
that does not exceed the conforming loan limit. For loans originated in 2009, the loan limit has been set by the American Recovery and Reinvestment Act of 2009.
That Act, in conjuction with prior legislation, allows for loan limits up to $729,750 for one-unit properties in certain high-cost areas in the contiguous United States.
How the HPI is Computed
The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties.
This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized
by Fannie Mae or Freddie Mac since January 1975. The HPI is updated each quarter as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac.
The new mortgage acquisitions are used to identify repeat transactions for the most recent quarter and for each quarter since the first quarter of 1975.
Comparison to Related Housing Price Measures Census Bureau Constant Quality House Price Index (CQHPI).
The FHFA HPI covers far more transactions than the Census survey.
The CQHPI covers sales of new homes and homes for sale, based on a sample of about 14,000 transactions annually, gathered through monthly surveys.
The quarterly HPI is based on more than 38 million repeat transaction pairs over 34 years.
This gives a more accurate reflection of current property values than the Census index.
The HPI also can be updated efficiently using data collected by Fannie Mae and Freddie Mac in the normal course of their business activity.
S&P/Case-Shiller® Home Price Index.
Both FHFA and C-S HPIs employ the same fundamental repeat-valuations approach, there are a number of data and methodology differences. Among the dissimilarities:
. The S&P/Case-Shiller indexes only use purchase prices in index calibration, while the all-transactions HPI also includes refinance appraisals.
The FHFA purchase only series is restricted to purchase prices, as are the S&P/Case-Shiller indexes.
. FHFA valuation data are derived from conforming, conventional mortgages provided by Fannie Mae and Freddie Mac.
The S&P/Case-Shiller indexes use information obtained from county assessor and recorder offices.
. The S&P/Case-Shiller indexes are value-weighted, meaning that price trends for more expensive homes have greater influence on estimated price changes than other homes.
The FHFA index weights price trends equally for all properties.
. The geographic coverage of the indexes differs. The S&P/Case-Shiller National Home Price Index, for example, does not have valuation data from 13 states.
The FHFA U.S. index is calculated using data from all states.
Additional Information
Proximity develops geodemographic-economic data and analytical tools and helps organizations knit together and use diverse data in a decision-making and analytical framework. We develop custom demographic/economic estimates and projections, develop geographic and geocoded address files, and assist with impact and geospatial analyses.
Wide-ranging organizations use our tools (software, data, methodologies) to analyze their own data integrated with other data.
Contact Proximity (888-364-7656) with questions about data covered in this section or to discuss
custom estimates, projections or analyses for your areas of interest.
