Are you familiar with the Freddie Mac House Price Index? Go take a peek.
The FMHPI is your friend. The index reports monthly change in house prices for national, state, and metropolitan statistical areas (MSAs). The data series starts with January, 1975 and usually runs two to three months behind the current date. The data is available in Excel or text files with seasonal adjustments or non-seasonally adjusted.
As an appraiser, I use the FMHPI in several ways for current work:
- Regional market trends.
I use this data set if I want to show how house prices are trending in my home regions of Sacramento or Fairfield/Vallejo.
- Market areas with little activity.
I cover Stonyford, a small community on the eastern edge of the coastal mountains with very few sales. I trend surrounding MSAs to show regional activity and offer this as the best evidence available for market trends in Stonyford.
- Market areas with significant non-conformity.
I cover the Sacramento Delta area, a place with a mix of small towns and small acreage residential properties plus some high quality mansions. Market trends are often influenced by the mix of sales and frequently are not reliable so I use the Sacramento MSA instead.
Where the FMHPI really shines is with retrospective work. My local MLS has data going back to 1998 for my county. That’s great for the past 23 years but what if a client wants a date of value before then? In the past two years I have had requests for appraisals dated in the 1980s and early 1990s on multiple occasions. Each time I used the FMHPI to determine market trends and calculate time adjustments.
Normally I download the data into Excel and generate the chart I want, discussed below. However, you can use the pre-built chart and table tool. This is the default chart:
You can add multiple states or MSAs for comparison by clicking the blue button:
You can also adjust the time period on the chart by sliding the time frame below:
Once you have the chart you want, you can print or download it as a PNG file to stick in your report or work file:
This tool is versatile and includes a table view showing percentage change.
However, I normally download the data into my Excel work file and create my own graphs. The FMHPI MSAs Excel workbooks are two sheets with MSAs A-L on Sheet 1 and M-Z on Sheet 2. Column A is the Month with MSAs in columns in alphabetical order like this:
Here’s my simple process to deal with the way dates are formatted.
Download the Seasonally Adjusted MSAs Index:
- Click the link
- Open the file and copy the Month Column into your Excel work file plus the columns of data for any MSAs you want to analyze.
- Leave a column to the immediate left of the MSAs you want to work with to fill in Excel-readable dates. I usually label it “Date Sold.”
- Then fill in the Date Sold column matching the dates in the FMHPI Month Column. 1975M01 is 1/1/75, 1975M02 is 2/1/75, etc. Fortunately, once you have the pattern, you can use Excel to autofill to the bottom:
You can now use this data in Excel to make line graphs or scatter graphs. If you don’t need all 46 years of data in your chart, graph only what you need. Here’s an example of how I would prepare the Sacramento MSA data for the past two years and past 10 years plus the graphs:
And here are the resulting graphs:
I hope you can see the value of this data. Let me know in the comments if you have questions or are already using this data.
If you have questions about this data, there is an FAQ from Freddie Mac.
Thanks to Penny Woods for encouraging me to share this with her Retrospective Appraisal class.
And thanks to Len Kiefer for sharing the charting tool built into the Freddie Mac website.