Economic Reports
Home Prices Edged Lower in August according to FHFA
October 23, 2009 by James K Barath, CMPS · Leave a Comment
According to the government, home values edged lower last month.
The Federal Housing Finance Agency’s Home Price Index report shows values down by 0.3 percent from the month prior – the index’s first down month since April.
The Home Price Index is based on the value of homes financed via Fannie Mae or Freddie Mac and, in this sense, the FHFA Home Price Index is more of a “national” real estate index that its private-sector cousin, the Case-Shiller Index.
But like the Case-Shiller, the HPI is as notable for what it specifically excludes as for what it includes. Most notably, the Home Price Index doesn’t account for homes meeting any of the following descriptions:
- Is considered new construction
- Is a multi-unit property
- Is financed by an entity other than Fannie Mae or Freddie Mac
Given the resurgence of FHA financing this year, this last exclusion is especially glaring. FHA represents about one-third of all mortgage loans in 2009.
Because of these exceptions, some analysts label the Home Price Index incomplete. The same could be said of every method of home valuation, however. Case-Shiller only collects data from 20 markets, for example.
In light of these shortcomings, therefore, what’s most important to today’s home buyers and sellers is to know that each of the “popular” home valuation reports show similar patterns — home prices have leveled and may be starting to recover in earnest.
For a region-by-region breakdown of the Home Price Index, visit the FHFA website.
Need more expert advice? Ask the team of Certified Mortgage Planning Specialists at Benchmark Mortgage.
About the Author: James K Barath is a Certified Mortgage Planning Specialist, qualified liability advisor and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James Barath today for your Borrow Smart Analysis - the CALM Approach to Borrowing ! His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy! 