The house price index is a broad measure of the price movement of single-family homes in the United States. What is the house price index? While home equity is benefiting current homeowners, those trying to enter the housing market are facing significant affordability challenges this year. Many factors reduce the value of a home, such as any new construction planned in an area that is not considered desirable, such as a highway. In addition to serving as an indicator of housing price trends, the HPI also functions as an analytical tool for estimating changes in mortgage default rates, early payments and affordability of the house.
The NAHB housing market index, for example, asks builders to forecast conditions six months in advance. The government report on new housing construction, or housing construction, focuses on residential construction activity across the country, adding up the number of new permits issued and houses that builders have just started working on. In addition, it analyzes the inventory of new homes for sale and the average and average prices of homes sold. Several price indices provide valuable clues about buyer interest and general optimism in the housing market. The National Association of Realtors (NAR) provides an existing home sales report on the number of existing homes sold each month, as well as data for the previous month and the previous year, for single-family homes, condominiums and cooperatives.
Several groups of realtors in states with significant real estate activity, such as California, Florida, Illinois and Texas, publish regular reports on sales activity and home prices in their respective states. The Case-Shiller Home Price Index seeks to measure the price of all existing single-family homes. Even rising interest rates can lower the value of a home, as rising mortgage rates make homes more expensive, reducing demand.
