Government : Home Values Edged Lower In August…How Does This Effect Knoxville Home Values?
According to the government, home values edged lower last month.
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
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.