FHFA House Price Index
The FHFA House Price Index , formerly the OFHEO House Price Index , calculated by the Federal Housing Finance Agency (FHFA), is a US real estate index .
concept
The FHFA House Price Index reflects the price development of US single-family homes and is published by the Federal Housing Finance Agency (FHFA). The Federal Building Finance Agency is the regulator of mortgage financiers Fannie Mae and Freddie Mac . It was created on July 30, 2008 from the merger of the Office of Federal Housing Enterprise Oversight (OFHEO) and Federal Housing Finance Board (FHFB).
The FHFA House Price Index is the most important real estate index in the USA after the Case-Shiller index . It is calculated monthly and quarterly for various sub-markets. Since 1975, the individual indices have mapped price developments on four aggregation levels. In addition to a nationwide residential real estate index, the indices are published at the level of 4 regions (West, Midwest, South and Northeast), 9 US Census Divisions , the 50 US states and the District of Columbia as well as around 300 metropolitan regions .
The index is calculated based on the sales prices of houses whose mortgages were bought or guaranteed by Freddie Mac and Fannie Mae. The FHFA House Price Index tracks rural areas better than the Case-Shiller Index, which focuses on real estate in metropolitan areas with correspondingly high prices. A disadvantage of all house price indices is that they are detailed, but due to the amount of data they are only published 2 months after the end of the investigation period. House price indices have a slightly negative correlation with stocks and bonds, and a slightly positive correlation with commodities and real estate investment trusts (REITs). The correlation with REITs is low.
The financial markets react sensitively to unexpected changes in the index; it is perceived as an indicator of developments in the US real estate market. FHFA House Price Index, Case-Shiller-Index or NAHB / Wells Fargo Housing Market Index belong to the group of indicators, the development of which has a noticeable influence on the stock indices .
composition
overview
The national FHFA House Price Index is divided into the following individual indices.
- Census Division East North Central (ENC), Midwest Region, affiliated states: Indiana, Illinois, Michigan, Ohio, Wisconsin
- Census Division East South Central (ESC), South Region, associated states: Alabama, Kentucky, Mississippi, Tennessee
- Middle Atlantic (MA) Census Division, Northeast Region, associated states: New Jersey, New York, Pennsylvania
- Census Division Mountain (MO), West Region, associated states: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming
- Census Division New England (NE), Northeast Region, associated states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
- Census Division Pacific (PAC), West Region, associated states: Alaska, Hawaii, California, Oregon, Washington
- South Atlantic (SA) Census Division, South Region, Associated States: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia
- West North Central Census Division (WNC), Midwest Region, affiliated states: Iowa, Minnesota, Missouri, Kansas, Nebraska, North Dakota, South Dakota
- West South Central Census Division (WSC), South Region, associated states: Arkansas, Louisiana, Oklahoma, Texas
Census divisions in comparison
The table shows the highs and lows in the census divisions during the real estate crisis.
| Census Division | Peak | date | Lowest point | date | Changes in % |
|---|---|---|---|---|---|
| East North Central | 195.57 | Jan. 2007 | 158.99 | March 2011 | −18.70 |
| East South Central | 200.97 | June 2007 | 179.97 | March 2011 | −10.45 |
| Middle Atlantic | 223.76 | Apr 2007 | 196.45 | Feb. 2012 | −12.21 |
| Mountain | 295.18 | March 2007 | 199.68 | Apr. 2011 | −32.35 |
| New England | 236.54 | Nov 2005 | 199.22 | March 2011 | −15.78 |
| Pacific | 281.36 | May 2006 | 169.14 | Feb. 2012 | −39.88 |
| South Atlantic | 243.45 | Feb 2007 | 177.15 | Apr. 2011 | −27.23 |
| West North Central | 216.83 | Feb 2007 | 191.68 | Feb 2011 | −11.60 |
| West South Central | 199.63 | Dec 2007 | 191.93 | Feb 2011 | −3.86 |
| Total market | 227.28 | Apr 2007 | 181.36 | March 2011 | −20.20 |
history
Historical overview
The national FHFA House Price Index started in January 1991 at 100 points. In the years that followed, the value of residential real estate in the United States rose steadily. In April 2007 the index reached an all-time high of 227.28 points. House prices thus rose by 127.3 percent over the entire period. It should be noted here that all data refer to the nominal prices in US dollars for the respective survey period, i.e. are not adjusted for inflation .
A long period of price increases in the real estate market had turned into a real estate bubble in the USA . With the falling property prices, the financial crisis became acute from 2007 onwards. At the same time, more and more borrowers could no longer service their loan installments, partly because of rising interest rates, partly because of a lack of income. Initially, these problems in the real estate sector primarily affected subprime loans , which were mainly granted to borrowers with low credit ratings . The speculative bubble burst. The banks stayed on their loans.
The real estate crisis caused the US government to take control of the two largest US mortgage lenders , Fannie Mae and Freddie Mac , in 2008 . There were price falls on the global stock markets. Because bad loans were resold ( securitization ) and they were scattered all over the world, the crisis spread globally due to the close interlinking of individual economies and financial flows. In the course of the financial crisis, the FHFA House Price Index fell in November 2008 to 197.36 points for the first time since December 2004, below the 200 point limit.
In March 2011, the index fell to 181.36 points, its lowest level since December 2003. Since the all-time high in April 2007, the decline in national house prices has been 20.2 percent. The decline was driven by the drop in home prices and a record number of foreclosures that drove down prices in the US real estate market.
Annual development
The table shows the development of the seasonally adjusted data of the national FHFA House Price Index since 1991.
| year | Peak | Lowest point | Final stand |
|---|---|---|---|
| 1991 | 101.95 | 100.00 | 101.95 |
| 1992 | 104.50 | 102.33 | 104.42 |
| 1993 | 107.68 | 104.20 | 107.68 |
| 1994 | 110.52 | 108.00 | 110.51 |
| 1995 | 113.83 | 110.85 | 113.83 |
| 1996 | 117.03 | 114.27 | 117.03 |
| 1997 | 121.06 | 117.18 | 121.06 |
| 1998 | 128.20 | 121.43 | 128.20 |
| 1999 | 136.10 | 128.97 | 136.10 |
| 2000 | 145.85 | 137.55 | 145.85 |
| 2001 | 155.66 | 146.79 | 155.66 |
| 2002 | 167.84 | 156.59 | 167.84 |
| 2003 | 181.26 | 168.86 | 181.26 |
| 2004 | 199.87 | 182.56 | 199.87 |
| 2005 | 219.68 | 201.24 | 219.68 |
| 2006 | 225.45 | 221.22 | 225.45 |
| 2007 | 227.28 | 218.75 | 218.75 |
| 2008 | 216.65 | 197.36 | 197.56 |
| 2009 | 199.59 | 193.89 | 193.89 |
| 2010 | 193.91 | 186.11 | 186.11 |
| 2011 | 184.74 | 181.36 | 183.47 |
| 2012¹ | 189.76 | 182.48 |
¹ June 30, 2012
Web links
Individual evidence
- ↑ Center for European Economic Research: Volatility Effects on the US Housing Market (1991–2009)
- ↑ a b Federal Housing Finance Agency: Downloadable Data ( Memento of the original dated November 24, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Focus: USA - Free Fall Home Prices , April 26, 2011
