What is the house price index?House Price Index

House price index, English is House Price Index, referred to as HPI for short, and is an indicator for measuring the price of single households in the United States or in a specific area.

Housing price index by Federal Housing Finance Agency (Federal Housing Finance Bureau FHFA) Production and release.Data statistics began in the 1970s, and the statistics include 50 states and more than 400 cities in the United States.The data mainly comes from Fanglima ( Fannie Mae) He Fangli ( Freddie mac) Including mortgage data for house purchase, securitized loan data, etc., but only for house mortgage loans within the limit of the amount, excluding huge mortgage loans.

The Federal Housing Finance Bureau uses the weighted computing algorithm to calculate the housing price index.People can use the FHFA official website to check the monthly or quarterly housing price index report to understand the volatility of house prices.

Researchers in the real estate industry or related industries will use the housing price index to learn about the current national housing burden, the proportion of prepaid, the mortgage ratio, and the risk of breach of contract.

Government agencies or the Fed will help analyze the inflation rate through the housing price index, because the house price index will directly affect the CPI of the consumer price index, while CPI can refer to inflation.

Investors will learn about the US economic situation through the housing price index, and the housing price index will assist in the investment strategy involving the real estate industry.

Directory of this article

What is the significance of the house price index?
How is the house price index prepared?
What is the difference between HPI and S & P/Case-Shiller u.S.National Home Price Index?
How to check the house price index?
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What is the significance of the house price index?

The housing price index is an index index for measuring housing price fluctuations in the U.S.unit.It is one of the most important reference values for housing prices.

1.For the federal government, the Federal Reserve and other institutions

From the housing price index, the government or the Fed can observe the development of the US economy from different angles.

When the housing price index rises, it usually brings more employment opportunities, and it shows that consumers have more consumer confidence, and consumer expenditure will increase, thereby making the overall consumption environment positive development speed and overall economic growth.

On the contrary, when the price index of the house decreases, it means that people’s consumption confidence has begun to decrease, consumption power has also decreased simultaneously, and the vitality of the market economy weakens, which may slow down economic development.

Therefore, the Fed may stimulate consumption, increase consumer confidence, enhance the price index of the housing, and help the economy to return to the appropriate development rhythm through interest rate cuts.If the price index of the house is growing too fast, it will control the growth rate through interest rate hikes to avoid serious inflation.

2.For the real estate industry and related industries

As a measurement indicator for changes in house prices, the housing price index is an important business reference indicator for the real estate industry and the banking industry.

Through the housing price index, the real estate development industry can track market trends to understand its own profitability.

The banking industry can learn through the house price index to understand the default rate of mortgage loans and early repayment rates in the process of buying a house.The changes in these values will directly affect the risk and profitability of banks.

3.For investors

Through the house price index, investors can analyze the trend from the aspects of real estate and the overall economy.

When the housing price index rises, first of all, related stocks and funds in the real estate industry usually rise simultaneously, such as real estate developers and building materials providers.

On the contrary, when the price index of the house decreases, the performance of these industries may be sluggish.

For the overall economy, the rise in the house price index usually means that consumers’ consumption confidence and consumption capacity increases, so the overall market will become more vibrant, and the transaction volume and transaction amount will show an upward trend.

However, if the housing price index rises too fast, as the Fed’s corresponding control policy is released, the market will also stabilize, and investors need to pay attention in time.

How is the house price index prepared?

The housing price index uses a weighted calculation method to measure the change in the qualified residential price to a percentage change from a specific start date.The housing price index of this specific date is 100.

The calculation methods are: Hedonic Regression (HR), Simple Moving Average (SMA), and Repeat-Sales Regression (RSR).

The calculated residential price is a mortgage loan that complies with the FANNIE MAE or Freddie Mac underwriting standards and does not exceed the standard loan limit.This number is related to the index issued by the Federal Housing Finance Bureau.Huge mortgage loans.

At the same time, the price index of the house is also a duplicate sales index, that is, the house price index will consider the average price change of the residential houses that are repeated.The price of $ 325,000 purchased this real estate again by the mortgage loan, and the housing price index will calculate this growth in the overall housing price index.

The calculated data comes from the purchase of mortgage or securitization mortgage loans in Fannie Mae or Freddie Mac residents.

What is the difference between HPI and S & P/Case-Shiller u.S.National Home Price Index?

The house price fluctuation index of the house price index mentioned above is the national housing price index in the United States, and the English is S & P/Case-Shiller U.S.National Home Price INDEX.Adjust the quality of the house.The Case-Shiller indicator is released once a month, which is a lagging indicator.The result of the indicator is usually a market for 2 months ago.

The difference between the house price index is:

Index type	House price index	Case-shiller
Index meaning	Track the trend of the price of housing prices in the U.S.unit by repeating the valuation method
Release frequency	Once a month
Producer and data source	Federal Housing Finance Bureau FHFA Data source Fang Limi and Fangli beauty	Statistics and produced by the county appraiser and recorder’s office
Use data	Including mortgage loans, financing evaluation, etc.	Purchase price of residential house
Calculation	Use the equivalent calculation methods of Hedonic Regression (HR), Simple Moving Average (SMA) and Repeat-Sales Regression (RSR), etc.	The adjustable calculation method of the adjustable value of the adjustment of Karl Case, Robert Shiller and Allan Weiss
Computing characteristics	Mainly adjusted according to price	Will be adjusted according to the quality of the house
Index coverage model	All 50 states in the United States	Residential price data from 37 states in the United States

How to check the house price index?

To check the housing price index, you can log in to the official website of Federal Housing Finance Agency, because FHFA is the only institution in the United States to produce and release the housing price index.You can check the housing price index report on its main site.

step one: Log in to FHFA official website: https://www.fhfa.gov/, Click the “Data & Tools” button in the menu bar at the top of the page.

Step 2: In the data page, click the “DOWNLOADABLE DATA” button to enter the downloadable data page

Step 3: Click “FHFA House Price Index” on the left side of the page

Step 4: In the housing price index page, click the “Latest FHFA House Price Index NEWS Release and Report” on the upper side to view the latest housing price index report

Step 5: At the bottom of the page, you can find the link to download the latest housing price index report.Users can download the data table as needed.

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