The Federal Housing Finance Agency just posted its 4th gain in the last 6 months and its 1st quarterly gain since 2007 with an increase of another 0.6 percent in October.
Not bad for what has seems like a 2009 everyone wants to forget. The Agency’s report is published on a monthly basis lagging the market by roughly 60 days.
The Federal Housing Finance Agency is different from the Case-Schiller Price Index which is also commonly used for the following reasons:
- HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
- HPI only accounts for re-sold homes — newly-built homes are excluded
- HPI aggregates national data whereas real estate markets are local phenomena
In general terms the Home Price Index can be useful to gage the entire market in terms of homes being resold, however it is specific to Memphis, Charlotte or any other housing market. To look at the specifics of Charlotte, the Case-Schiller data shows a 7% decline over the last 12 months. This is roughly the same as the national market.
Both of these indices point to stabilizing real estate prices which will be good for both investors and owner occupants alike.
Most of these data sets point to the worst being behind us. I recently was on a conference call with several real estate economists and the consensus across nearly all metro areas is that supplies of homes are declining. Assuming mortgage rates stay stabilized for much of 2010, the market looks poised for a rebound.
I’m personally feeling more confident now and I can tell you customers are too. We’ve seen a spike in activity having written many contracts in December. This is points to January being our busiest month for closings since September 2008.
Tags: Case-Shiller Index, Charlotte, FHFA, Home Price Index, Memphis
