The Home Price Index Shows Flat For November

By
Mortgage and Lending with Pacor Mortgage Corp

Home Price Index from peak to presentHome values were reported unchanged in November 2010, on average, according to the Federal Home Finance Agency's Home Price Index

We say "on average" because the government's Home Price Index is a data composite for the country. The index doesn't measure citywide changes in places like Chicago , nor does it get granular down to the neighborhood level to measure places like Evergreen Park.

Instead, the Home Price Index groups state data in 9 regions with each regions having as few as 4 states in it, and as many as 8.

Not surprisingly, each of the regions posted different price change figures for the period of October-to-November 2010.

A sampling includes:

  • Values in the Pacific region rose +1.2%
  • Values in the New England region rose +0.3%
  • Values in the Mountain region fell -1.9%

The complete regional list is available at the FHFA website.

That said, none of these numbers are particularly helpful to today's home buyers and sellers and that's because everyday people don't buy and sell homes on the Regional Level. We do it locally and the government's Home Price Index can't capture data at that level.

It's a similar reason to why the Case-Shiller Index is irrelevant to buyers and sellers.

November's Case-Shiller Index showed home values down 1 percent in November, but that conclusion is a composite of just 20 cities nationwide -- and they're not even the 20 largest cities. Philadelphia, Houston and San Jose are conspicuously absent from the Case-Shiller list.

So why are reports like the Home Price and the Case-Shiller Index even published at all? Because, as national indicators, they help governments make policy, businesses make decisions, and banks make guidelines. Entities like that are national and require data that describe the economy as a whole. Home buyers and sellers, by contrast, need it locally.

Since peaking in April 2007, the Home Price Index is off 14.9 percent.

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Rainer
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Chris Miller Nevada Land with Water Rights
Vegas Grand Realty and Property Management - Mesquite, NV
Land with Water Rights For Sale

Nice chart, when do we hit the bottom? Are rates going up this year?

Jan 26, 2011 05:40 AM #1
Rainmaker
170,895
Kevin Lanham
Pacor Mortgage Corp - Oak Lawn, IL
Chicagoland FHA Expert

Chris - Assuming there aren't any dramatic financial disasters or improvements, I would expect rates to return to the 5-5.5% range the first part of the year and perhaps even increase to 5.5-6% the second half. I also had the Jets playing the Packers in the Super Bowl...so I'm not right all the time...I'm actually far from it.

Jan 26, 2011 05:56 AM #2
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Rainmaker
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Kevin Lanham

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