House price index

A house price index (HPI) measures the price changes of residential housing as a percentage change from some specific start date (which has HPI of 100). Methodologies commonly used to calculate a HPI are the hedonic regression (HR), simple moving average (SMA) and repeat-sales regression (RSR). A house price index (HPI) measures the price changes of residential housing as a percentage change from some specific start date (which has HPI of 100). Methodologies commonly used to calculate a HPI are the hedonic regression (HR), simple moving average (SMA) and repeat-sales regression (RSR). The US Federal Housing Finance Agency (formerly Office of Federal Housing Enterprise Oversight a.k.a. OFHEO) publishes the HPI index, a quarterly broad measure of the movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it 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 or Freddie Mac since January 1975. Since the HPI index only includes houses with mortgages within the conforming amount limits, the index has a natural cap and does not account for 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.