Every quarter, the Federal Housing Finance Agency publishes the Housing Price Index (HPI) for the U.S., Census divisions, states, Metropolitan Statistical Areas (MSAs) and houses not in MSAs. The HPI is a broad measure of the movement of single-family house prices. It is a weighted index that measures average price changes in repeat sales or refinancings on the same properties. 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. Obviously, some properties are excluded from the "sample." However, because of the breadth of its sample, the index is more robust than other indexes which may be available.The base of the index is 1991. So, for example, if Salt Lake City had an index of 199.96 in the second quarter of 2009 (which it did), the index indicates that average home prices had basically doubled since 1991. Tracking four-quarter changes in the index indicates whether home prices (on average are rising or falling). Overall, in the third quarter of 2010, Utah home prices were down by less than 3 percent compared to the same quarter in 2009. While that's not anything to boast about, it represents a notable improvement from the 10-percent decline two quarters earlier.
The graph that accompanies this post shows year-over changes in the HPI for Salt Lake City, Las Vegas, and St. George since 1990. Obviously, both St. George and Las Vegas markets participated more extensively in the speculation which resulted in the current housing bust than did Salt Lake City. The bigger the boom, the bigger the bust. Plus, Salt Lake came to the boom later than most and is closer to experiencing an actual increase in home prices.
However, the worst of the home price declines appear to be over in both Las Vegas and St. George and both housing markets are working to "right" themselves.
For more information on the Housing Price Index, go to: http://www.fhfa.gov
