What is a HPI? Housing Price Index

HI there, thought you might benefit from learning what the heck a “housing price index” is. As a real estate investor, I do pay attention to trends and following the HPI has helped me spot or ‘time’ when it is appropriate to enter a market.

The latest press release from the OFHEA gave an excellent definition of it below:

1. What is the value of the HPI?
The 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 homes in the U.S. as a whole, in various
regions of the country, and in the individual states and the District of Columbia. The HPI is
published by the Office of Federal Housing Enterprise Oversight (OFHEO) using data provided by
Fannie Mae and Freddie Mac. OFHEO began publishing the HPI in the fourth quarter of 1995.