What is the FHFA House Price Index?
The FHFA House Price Index (HPI) is a broad measure of single-family home price changes published quarterly by the Federal Housing Finance Agency. Unlike the Case-Shiller index which covers 20 metros, the FHFA HPI covers all 50 states, Washington D.C., and over 400 metropolitan statistical areas, making it the most geographically comprehensive home price index available.
The FHFA HPI uses a repeat-sales methodology similar to Case-Shiller but draws its data exclusively from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. This means it covers conforming loans (generally up to $766,550 in most areas as of 2024) but excludes cash transactions, jumbo loans, FHA/VA loans, and properties purchased by investors without conforming financing.
Why the FHFA HPI matters
For real estate investors operating outside the 20 Case-Shiller metros, the FHFA HPI is often the best available price index. If you invest in Memphis, San Antonio, Indianapolis, or any of hundreds of smaller markets, the FHFA HPI is your primary index for tracking price trends at the metro and state level.
The FHFA HPI is also used by the government itself. The conforming loan limits are adjusted annually based on the FHFA HPI, making it a regulatory benchmark. Appraisers and lenders reference the index when making market adjustment determinations.
Data access and granularity
The FHFA provides free access to its HPI data through its website, including downloadable datasets at the national, state, metro, county, and ZIP code level. This granularity is far greater than Case-Shiller and makes the FHFA HPI particularly useful for investors who need neighborhood-level price trend data.
The HPI calculator on the FHFA website allows you to enter a purchase date, location, and price, and see what the estimated current value would be based on the index. This is useful for quick back-of-envelope appreciation estimates on properties you are evaluating.
Limitations
The conforming-loan-only data source creates a blind spot. Cash transactions represent 25-35% of home sales nationally and a much higher percentage in investor-heavy markets. By excluding cash sales, the FHFA HPI may not fully reflect price dynamics in markets where investors are dominant buyers. Additionally, high-end properties financed with jumbo loans are excluded, which can affect accuracy in expensive markets.
The quarterly publication schedule (with a one-quarter lag) makes the data less timely than monthly indices. For real-time market assessment, supplement the FHFA HPI with local MLS data and other indices that update monthly.
Comparing indices for investment decisions
Smart investors use multiple indices together. The Case-Shiller index for major metro trends, the FHFA HPI for broader geographic coverage and ZIP-level detail, and local MLS statistics for current, granular market conditions. When all three sources agree on market direction, you can have high confidence in the trend. When they diverge, investigate the cause -- it often reveals important information about which market segments are driving or lagging the overall trend.