The housing market is an ongoing rollercoaster of real estate trends that fluctuate depending on a wide range of factors. Some aspects of the housing market are relatively predictable. Others seem to come out of nowhere.
Real estate agents, investors, banks, and consumers will make decisions depending on housing trends.
Thus, the House Price Index (HPI).
Home Avenue offers for sale by owner MLS real services for home sellers and buyers and Full Service Realtor Flat Fee real estate services in the Minneapolis and St. Paul markets. Below is our take on the House Price Index and whether you should trust it when buying or selling a home.
Understanding the House Price Index in Real Estate
The House Price Index monitors and measures single-family house prices in the United States. HPI indicates price trends and mortgage defaults rates, prepayments, and determines the affordability of housing across all markets.
The HPI reports are published by the Federal Housing Finance Agency (FHFA). Fannie Mae and Freddie Mac provide the data based on their purchases or studies of the mortgages. The HPI measures average price changes on properties that are repeatedly financed or properties that are refinanced.
Fannie Mae and Freddie Mac publish a monthly report and a more comprehensive report every quarter.
Why You Should be Interested in the House Price Index
If you were able to comprehend the summary above, then you probably already know why you should at the very least have an interest in the House Price Index.
The HPI could determine if and when you buy or sell your home. If house prices are low, it’s a buyers market. Conversely, if they are high, it’s a seller’s market. Having a basic understanding of the House Price Index may help you in your decision when buying or selling a home.
Should You Trust the House Price Index?
The answer is yes and no.
Remember, the HPI is based on average movements of average houses in average locations that are grouped according to the average prices. It is a somewhat narrow aggregate that does not paint the entire picture of the housing market.
The median home value in 2017 was just over $210,000. Therefore, if your home falls within the price range, it would be considered average. You may want to follow the HPI reasonably closely.
If your house is above or below the average, however, the House Price Index may not apply to you or the market your house falls in as much. Within the overall market, some sub-markets are determined by location. Therefore, the price of the homes may be adjusted to reflect that location.
This is true with any market whether it’s Minneapolis, St. Paul, Plymouth, Eden Prairie, or Minnetonka.
Does the HPI Affect a Flat-Fee Realty Service?
Not as much as a commission based service.
Whether you are selling your home or buying a home, a flat-fee real estate service charges you either a flat fee to buy or sell your or offers a much smaller percentage in commissions. If you are a buyer, you get a cash-back rebate for purchasing your home through flat-fee realty companies such as Home Avenue.
Buy or Sell Your Home Through home Avenue
If you are ready to buy or sell your home in Minneapolis, Minnesota, contact Home Avenue. We offer full real estate packages, for sale by owner (FSBO) packages, and flat-fee Realtor packages for both buyers and sellers.
To get started with a free, no-obligation consultation, call us at 952-929-7355, or you can message us at firstname.lastname@example.org.