A house price index (HPI) measures the price changes of residential housing as a percentage change from some specific start date (which has an HPI of 100). Methodologies commonly used to calculate an HPI are hedonic regression (HR), simple
moving average
In statistics, a moving average (rolling average or running average or moving mean or rolling mean) is a calculation to analyze data points by creating a series of averages of different selections of the full data set. Variations include: #Simpl ...
(SMA), and repeat-sales regression (RSR).
United States
FHFA/OFHEO
The US Federal Housing Finance Agency (formerly Office of Federal Housing Enterprise Oversight, a.k.a. OFHEO) publishes the HPI index, a broad quarterly measure of the movement of single-family house prices.
The HPI is a weighted, repeat-sales index that measures average price changes in repeat sales or refinancings on the same properties in 363 metropolises. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by
Fannie Mae
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the New ...
or
Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is an American publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons, Virginia.jumbo mortgages.
The HPI was developed in conjunction with OFHEO's (now FHFA) responsibilities as a regulator of Fannie Mae and Freddie Mac. It is used to measure the adequacy of their capital against the value of their assets, which are primarily home mortgages.
On July 30, 2008, OFHEO became part of the new Federal Housing Finance Agency (FHFA). Accordingly, the index is now termed the FHFA HPI.
S&P/Case-Shiller indexes
The Case-Shiller index prices are measured monthly and track repeat sales of houses using a modified version of the weighted-repeat sales methodology proposed by Karl Case, Robert Shiller, and Allan Weiss. This means that, to a large extent, it can adjust for the quality of the homes sold, unlike simple averages.
The Case-Shiller index has a long lag time as a monthly tracking index. Typically, it takes about 2 months for S&P to publish the results, as opposed to 1 month for most other monthly indices and indicators. In addition, specific indexes are available for specific metropolitan areas and composite indexes for the top 20 and 10 metro areas nationwide.
FNC Residential Price Index
FNC Inc. publishes the Residential Price Index based on data collected from public records blended with real-time appraisals of property and neighborhood attributes. The RPI is the mortgage industry's first hedonic price index for residential properties. The RPI is constructed to gauge price movement among non-distressed home sales and excludes sales of foreclosed properties.
The RPI has a lag time of about two months as a monthly tracking index. Specific indices are available for specific metropolitan areas, and composite indices are available for the top 10, 20, 30, and 100 metro areas. The RPI is also available at the zip code level and can be constructed to track price trends for specific characteristics (e.g., ranch-style house, colonial-style house, etc.) since preferences can change over time.
HouseCanary Home Price Index
HouseCanary publishes monthly HPI data at block, block group, zip code, metro division, and metropolitan levels. These indices include forecasts up to 3 years into the future.
United Kingdom
House Price Indices (HPIs) have been produced in the UK since around 1973, initially by mortgage providers and more recently by government bodies. More recently, they have come from property market websites.
Governmental house price indices
** In June 2016, the UK House Price Index (UK HPI) was launched as a collaboration between the
Office for National Statistics
The Office for National Statistics (ONS; ) is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the Parliament of the United Kingdom, UK Parliament.
Overview
The ONS is responsible fo ...
, HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland. The index is calculated using land registration data (such as HM Land Registry). The UK HPI release provides comprehensive information on the change in house prices monthly and annually. It also includes analysis by geography, type of buyer, type of dwelling, property status (whether the property is a new build or not), and funding status (cash or mortgage). Several guidance documents are published alongside the release explaining its methodology and the difference between the different sources of official house price statistics.
** From 2012 to 2016, the Office for National Statistics produced a monthly House Price Index (HPI) release, calculated using mortgage financed transactions collected via the Regulated Mortgage Survey by the Council of Mortgage Lenders. These covered the majority of mortgage lenders in the UK. The UK House Price Index replaced this release in June 2016. ** Historically,
HM Land Registry
His Majesty's Land Registry is a non-ministerial department of His Majesty's Government, created in 1862 to register the ownership of land and property in England and Wales. It reports to the Ministry of Housing, Communities and Local Governme ...
also published a separate house price index calculated by Calnea Analytics. It used the HM Land Registry’s data, which consists of the transaction records of all residential property sales in England and Wales. It uses Repeat Sales Regression. The UK House Price Index replaced this release in June 2016.
** DCLG House Price Index by the Department of Communities and Local Government used the mix-adjusted method based on weighted averages. The data used in this HPI was mortgage completion data supplied by a few giant lenders. DCLG handed the production of this index to the Office for National Statistics in 2012
** A House Price Index used to be produced by the Department for the Environment.
Private sector house price indices
* The Nationwide House Price Index and Halifax House Price Index use Hedonic regression (also known as the characteristics based method) using their own datasets compiled from their mortgage lending. These indices have a longer time-series than the Governmental HPIs.
Current UK indices
Ireland
In the
Republic of Ireland
Ireland ( ), also known as the Republic of Ireland (), is a country in Northwestern Europe, north-western Europe consisting of 26 of the 32 Counties of Ireland, counties of the island of Ireland, with a population of about 5.4 million. ...
Permanent TSB
Permanent TSB Group Holdings plc, formerly Irish Life and Permanent plc is a provider of personal financial services in Ireland. Irish Life Assurance plc and the Irish Permanent Building Society merged to form the Irish Life and Permanent Group ...
and the
Economic and Social Research Institute
The Economic and Social Research Institute (Institiúid Taighde Eacnamaíochta agus Sóisialta in Irish) is an Irish research institute founded in 1960 to provide evidence-based research used to inform public policy debate and decision-making. ...
India
India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
,
National Housing Bank
National Housing Bank (NHB), is a regulatory body for overall regulation and licensing of housing finance companies in India. It is under the jurisdiction of Ministry of Finance, Government of India. It was set up on 9 July 1988 under the Na ...
completely owned by
Reserve Bank of India
Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...
computes an index terme NHB RESIDEX The index was formulated based on a pilot study covering 5 cities,
Delhi
Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, but spread chiefly to the west, or beyond its Bank (geography ...
,
Mumbai
Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian state of Maharashtra. Mumbai is the financial capital and the most populous city proper of India with an estimated population of 12 ...
,
Kolkata
Kolkata, also known as Calcutta ( its official name until 2001), is the capital and largest city of the Indian state of West Bengal. It lies on the eastern bank of the Hooghly River, west of the border with Bangladesh. It is the primary ...
,
Bangalore
Bengaluru, also known as Bangalore (List of renamed places in India#Karnataka, its official name until 1 November 2014), is the Capital city, capital and largest city of the southern States and union territories of India, Indian state of Kar ...
and
Bhopal
Bhopal (; ISO 15919, ISO: Bhōpāl, ) is the capital (political), capital city of the Indian state of Madhya Pradesh and the administrative headquarters of both Bhopal district and Bhopal division. It is known as the ''City of Lakes,'' due to ...
representing the five regions of the country. Actual transactions prices are used to compute an Index reflecting the market trends. 2007 is taken as the base year for the study to be comparable with the WPI and CPI, although alternative variants using 2012 and 2017 as the base years are also calculated. Some of the cities covered are Delhi with NCR, Bangalore, Mumbai, Kolkata, Bhopal, Hyderabad, Faridabad, Patna, Ahmedabad, Chennai, Jaipur, Lucknow, Pune, Surat, Kochi, Bhubaneshwar, Guwahati, Ludhiana, Vijayawada, Indore, Chandigarh, Coimbatore, Dehradun, Meerut, Nagpur and Raipur. The list of cities covered in the index is gradually expanding.
Canada
In Canada, the New Housing Price Index is calculated monthly by
Statistics Canada
Statistics Canada (StatCan; ), formed in 1971, is the agency of the Government of Canada commissioned with producing statistics to help better understand Canada, its population, resources, economy, society, and culture. It is headquartered in ...
. Additionally, a resale house price index is also maintained by the Canadian Real Estate Association, based on reported sale prices submitted by real estate agents, and averaged by region. In December 2008, the private National Bank and the information technology firm Teranet began a separate monthl house price index based on resale prices of individual single-family houses in selected metropolitan areas, using a methodology similar to the Case-Shiller index and based on actual sale prices taken from government land registry databases. This allows Teranet and the National Bank to track prices without allowing periods of high sales in one city to push up the national average.The shocking truth about the value of your home , ''
Maclean's
''Maclean's'' is a Canadian magazine founded in 1905 which reports on Canadian issues such as politics, pop culture, trends and current events. Its founder, publisher John Bayne Maclean, established the magazine to provide a uniquely Canadian ...
'', 2009-02-23 The National Bank also operates a
forward market
The forward market is the informal over-the-counter financial market by which contracts for future delivery are entered into. It is mainly used for trading in foreign currencies, where the contracts are used to hedge against foreign exchange r ...
on Canadian housing prices.
See also
*
Real estate appraisal
Real estate appraisal, home appraisal, property valuation or land valuation is the process of assessing the value of real property (usually market value). The appraisal is conducted by a licensed appraiser. Real estate transactions often require ...
Resources
* Downie, M. L. & Robson G. (2007) Automated Valuation Models: an international perspective. Pp 11 Council of Mortgage Lenders, London, .
* Lim, S. & Pavlou M. (2007 An improved national house price index using Land Registry data RICS research paper series: Volume 7 Number 11. Pp 10–14. London, . Accessed 21 November 2007.
How is the HPI calculated? (2014) Accessed 9 May 2014