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Welcome to the Industry page of FHFA’s website.  This page provides consolidated resources for small and large companies, trade groups, advocacy organizations, vendors, originators, servicers, investors, and mortgage insurers, among others who are interested in the nation’s housing finance system. 

 

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Prepayment Monitoring Report - Third Quarter 201927458<p>On June 3, 2019, Fannie Mae and Freddie Mac began issuing a new common mortgage-backed security, known as the Uniform Mortgage-Backed Securities or UMBS, through their jointly developed Common Securitization Platform, bringing to fruition important elements of FHFA's <a href="/AboutUs/Reports/Pages/2014-Conservatorships-Strategic-Plan.aspx">2014 Strategic Plan for the Conservatorships of</a>&#160;<a href="/AboutUs/Reports/Pages/2014-Conservatorships-Strategic-Plan.aspx">Fannie Mae and Freddie Mac</a>.&#160; On March 12, 2019 forward trading of UMBS began in the “To-Be-Announced&quot; (TBA) market <a href="#footNote1">[1]</a>, with first settlements of the UMBS trades coinciding with their initial issuance by the Enterprises on June 3, 2019.</p> <p>FHFA encouraged Fannie Mae and Freddie Mac to develop this new security to broaden and enhance liquidity in the secondary market for residential mortgages and to reduce costs to taxpayers.<a href="#footNote2">[2]</a>&#160; To address those goals, UMBS issued by Fannie Mae and Freddie Mac trade in the TBA market without regard to which Enterprise is the issuer, effectively merging the formerly separate markets for mortgage-backed securities issued by each Enterprise. </p><p>Consistency of prepayment rates is important to the success of UMBS and to the efficiency and liquidity of the secondary mortgage market.&#160; Some industry stakeholders have expressed concern that the rates of prepayment of the Enterprises' securities might materially diverge and undermine their fungibility.&#160; FHFA has taken a number of steps to promote the continued consistency of prepayment rates of Fannie Mae- and Freddie Mac-issued mortgage-backed securities (MBS).&#160; This quarterly report provides market participants additional transparency into a sample of the data FHFA receives and reviews on a monthly basis.</p><p>Ex post monitoring of prepayment rates is part of a broader effort to assure investors that cash flows from UMBS will be similar regardless of which Enterprise is the issuer.&#160; This report provides insight into how FHFA monitors the consistency of prepayment rates across cohorts of the Enterprises' TBA-eligible MBS,<a href="#footNote3">[3]</a> where a cohort consists of those Enterprise TBA-eligible securities with the same coupon, maturity, and loan-origination year and total combined issuance across the Enterprises exceeds $10 billion.&#160; A prepayment on a mortgage loan is the amount of principal paid in advance of the loan's scheduled payments. &#160;Full prepayment occurs when a borrower pays off the loan ahead of the scheduled maturity.&#160; If a borrower defaults on the mortgage loan, the Enterprise will pay investors the remaining principal balance and remove the loan from the MBS.&#160; That action has the same effect on investors as a full prepayment. &#160;Partial prepayment occurs when a borrower pays principal in addition to the regularly scheduled payment of principal and interest. <br></p><p> <a name="footNote1">[1]</a> The TBA market is a forward market for certain mortgage-backed securities, including those issued by Fannie Mae and Freddie Mac.</p><p> <a name="footNote2">[2]</a> See <a href="/AboutUs/Reports/ReportDocuments/Single%20Security%20Update%20final.pdf"> <span style="text-decoration&#58;underline;"> <em>An Update on the Structure of the Single Security</em></span></a>, May 2015, p. 4</p><p> <a name="footNote3">[3]</a> To avoid double counting, only first-level securitizations are included in the analysis. Second-level securitizations (Megas, Giants, and Supers) are excluded, with the exception of fastest quartile analyses in which case multi-lender second-level securitizations are included.&#160;&#160;&#160;<br>&#160;</p>12/9/2019 4:00:25 PMHome / About FHFA / Reports / Prepayment Monitoring Report - Third Quarter 2019 Prepayment Monitoring 354https://www.fhfa.gov/AboutUs/Reports/Pages/Forms/AllItems.aspxhtmlFalseaspx
Statement by Dr. Mark A. Calabria Regarding the Financial Stability Oversight Council Principals Meeting27399<h2 style="text-align&#58;center;">FINANCIAL STABILITY OVERSIGHT COUNCIL PRINCIPALS MEETING </h2><p><br>Under the Dodd-Frank Act, one of the Council’s core purposes is “to promote market discipline, by eliminating expectations on the part of shareholders, creditors, and counterparties of” large financial institutions “that the Government will shield them from losses…” Simply stated, the Council’s job is to end bailouts.&#160; &#160;&#160;&#160; </p><p>I remain concerned that the actions taken just over a decade ago, such as the TARP, reinforced the expectation of bailouts. I also remain concerned that as memories of the 2008 financial crisis fade, so does the resolve for ending bailouts. Dodd-Frank ultimately leaves ending bailouts to the discretion of regulators, and I, for one, am committed to using all the tools at my disposal to do just that. I believe the nonbank guidance is an important step toward fulfilling that purpose and ending bailouts. </p><p>Some of the previous nonbank designations were done in such a manner that raised the possibility that designated entities would be perceived as “too big to fail.” In doing so, the Council ran the risk that a designation would distort market expectations and reduce market discipline, contrary to its statutory purposes. I believe the approach the Council adopted yesterday reduces that risk.</p><p>Some commentators have suggested that this guidance eliminates the possibility of future nonbank designations. If I believed that claim to be correct, I would not have voted for this guidance. However, I do not believe yesterday’s guidance forecloses the possibility of future designations. For instance, it is hard for me to imagine an entity could be systemic without that entity engaging in activities or practices that are systemic. In fact, I believe the guidance that the Council adopted yesterday will enable the Council to begin the process of considering an activities-based review of mortgage finance markets. Given that our mortgage and housing markets have been at the center of almost every recession and financial crisis in American history, I welcome the start of that process.</p><p>In addition to property markets, there is the global systemic importance of sovereign debt markets. I believe this is an area where an activities approach is urgently needed and is perhaps the only avenue of redress. While the Council’s authorities do not allow us to designate foreign or domestic governments as systemically important, there is no denying the central role that sovereign debt has played in the history of global financial crises.</p><p>Counter to the conventional narrative, it was not any single entity or narrow group of entities that caused the financial crisis. For instance, we were already in a recession for at least a year before the failure of Lehman. It was a property boom and bust that drove the crisis, which was obviously the result of a set of activities and practices, not a single entity. </p><p>Yesterday’s guidance improves the Council’s process of engaging with nonbanks under consideration for designation by making it more efficient, transparent, and robust. Adopting this guidance enables the Council to begin this process of consideration – not to prejudge or foreclose any conclusions. This is critical to fulfilling this Council’s duty to promote financial stability and end bailouts.</p>12/5/2019 8:15:13 PMUnder the Dodd-Frank Act, one of the Council’s core purposes is “to promote market discipline, by eliminating expectations on the part of shareholders, creditors, and 753https://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Enterprise Non-Performing Loan Sales Report - June 201930109<p>The Federal Housing Finance Agency (FHFA) today released its semiannual report&#160;providing information about the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises).&#160; The <a href="/AboutUs/Reports/ReportDocuments/June-2019_NPL-Sales-Report.pdf"> <em> Enterprise Non-Performing Loan Sales Report</em>&#160;</a>includes information about NPLs sold through June 30, 2019 and reflects borrower outcomes on NPLs sold through December 2018 and reported through June 30, 2019.&#160; The sale of NPLs reduces the number of delinquent loans in the Enterprises' portfolios.&#160; FHFA and the Enterprises impose <a href="/Media/PublicAffairs/Pages/Non-Performing-Loan-Sale-Guidelines.aspx"> requirements</a> on NPL buyers designed to achieve more favorable outcomes for borrowers than&#160;foreclosure.&#160;&#160;This report shows that, through June 30, 2019, the Enterprises sold 117,466 NPLs representing a total unpaid principal balance (UPB) of $22.2 billion.</p><p> <em><a href="/Media/PublicAffairs/Pages/FHFA-Releases-Report-on-Non-performing-Loan-Sales_12-2019.aspx">Related News Release</a></em></p>12/2/2019 6:00:45 PMHome / About FHFA / Reports / Enterprise Non-Performing Loan Sales Report - June 2019 Enterprise 233https://www.fhfa.gov/AboutUs/Reports/Pages/Forms/AllItems.aspxhtmlFalseaspx
FHFA House Price Index Frequently Asked Questions21869​ <table width="75%" class="ms-rteTable-4" bgcolor="#f1f1f1" cellspacing="0"><tbody><tr class="ms-rteTableEvenRow-4"><td class="ms-rteTableEvenCol-4" style="width&#58;100%;"><h2 style="text-align&#58;center;">​​​Table of Contents<br></h2><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest1"><strong>1. What is the value of the FHFA House Price Index (HPI)?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest2"><strong>2. What transactions are covered in the FHFA HPI?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest3"><strong>3. How is the FHFA HPI computed?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest4"><strong>4. How often is the FHFA HPI published?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest5"><strong>5. How is the FHFA HPI updated?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest6"><strong>6. How do I interpret “four-quarter,” “one-year,” “annual,” and “one-quarter” price changes?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest7"><strong>7. How are Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions defined and what criteria are used to determine whether an MSA index is published?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest8"><strong>8. Does FHFA use the September 2018 revised Metropolitan Statistical Areas (MSAs) and Divisions?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest9"><strong>9. What geographic areas are covered by the FHFA HPI?&#160;</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest10"><strong>10. What is the methodology used in computing the FHFA HPI?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest11"><strong>11. How does the FHFA HPI differ from the Case-Shiller®&#160;Index?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest12"><strong>12. How does the FHFA House Price Index differ from the Census Bureau’s Constant Quality House Price Index (CQHPI)?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest13"><strong>13. Where can I access MSA index numbers and standard errors for each year and quarter?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest14"><strong>14. What role do Fannie Mae and Freddie Mac play in the FHFA HPI?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest15"><strong>15. Why is the FHFA HPI based on Fannie Mae or Freddie Mac mortgages?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest16"><strong>16. When are the indexes normalized in the downloadable ASCII data?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest17"><strong>17. Is the FHFA HPI adjusted for inflation?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest18"><strong>18. How do I use the manipulatable data (in TXT files) on the Web site to calculate appreciation rates?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest19"><strong>19. How is&#160;the FHFA HPI constructed for MSAs?...</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest20"><strong>20. How can the FHFA HPI for an MSA be linked to ZIP codes within that MSA?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest21"><strong>21. How and why is the FHFA HPI revised each quarter?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest22"><strong>22. What transaction dates are used in estimating the index?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest23"><strong>23. Are foreclosure sales included in the FHFA HPI?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest24"><strong>24. How are the monthly FHFA House Price Indexes calculated?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest25"><strong>25. How are the Census Division and U.S. FHFA HPIs formed?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest26"><strong>26. What weights are used in forming the Census Division and U.S. FHFA HPIs?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest27"><strong>27. For those FHFA HPIs that are seasonally-adjusted, what approach is used in performing the seasonal adjustment?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest28"><strong>28. Do you have an FHFA&#160;HPI&#160;that includes loans which are not purchased or securitized by Fannie Mae or Freddie Mac?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest29"><strong>29. Is there an FHFA HPI that corrects for distressed sales?</strong></a></p><p> <a href="/Media/PublicAffairs/Pages/House-Price-Index-Frequently-Asked-Questions.aspx#quest29"><strong>30. Can I use the data in the FHFA HPI and, if so, how should the index be cited?</strong></a></p></td></tr></tbody></table><p> <br> &#160;</p><ol><li> <strong><a name="quest1">What is the value of the FHFA House Price Index (HPI)?</a></strong><br><br>The FHFA House Price Index (HPI) is a broad measure of the movement of single-family house prices.&#160; The FHFA HPIs are built on tens of millions of home sales and offer insights about house price fluctuations at the national, census division, state, metro area, county, ZIP code, and census tract levels.&#160; The FHFA HPIs use a fully transparent methodology based upon a weighted, repeat-sales statistical technique to analyze transaction data from Fannie Mae and Freddie Mac.&#160;&#160;The FHFA HPIs also provide housing economists with an analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.<br><br> Although FHFA constructs several indexes for different geographies and periods, the entire suite of HPIs is often referenced, in a general sense, as the &quot;FHFA HPI&quot;.&#160; The production of the FHFA HPI is statutorily mandated (12 U.S.C. 4542).&#160; The Office of the Federal Housing Enterprise Oversight (OFHEO), one of FHFA's predecessor agencies, began publishing the HPI in the fourth quarter of 1995.&#160; <br> <br>FHFA releases data and reports on a quarterly and monthly basis. The flagship FHFA HPI uses seasonally adjusted, purchase-only data, unless otherwise noted.&#160; Additional indexes are based on other data including refinances,&#160;FHA mortgages, and real property records.&#160; All the indexes can be downloaded from the FHFA website.<br><br>&#160;</li><li> <strong><a name="quest2">What transactions are covered in the FHFA HPI?</a></strong><br><br>The FHFA HPI is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. Conforming refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and that does not exceed the conforming loan limit. For loans originated in the first nine months of 2011, the loan limit was set by Public Law 111-242. That law, in conjunction with prior legislation, provided for loan limits up to $729,750 for one-unit properties in certain high-cost areas in the contiguous U.S. Mortgages originated after September 30, 2011 were no longer subject to the terms of prior initiatives and, under the formula established under the Housing and Economic Recovery Act of 2008, the “ceiling” limit for one-unit properties in the contiguous U.S. fell to $625,500. For 2019-acquired loans, the ceiling limit rose to $726,525 for one-unit homes in the contiguous U.S.<br><br>​Conventional mortgages are those that are neither insured nor guaranteed by the FHA, VA, or other federal government entities. Mortgages on properties financed by government-insured loans, such as FHA or VA mortgages, are excluded from the FHFA&#160;HPI, as are properties with mortgages whose principal amount exceeds the conforming loan limit. Mortgage transactions on condominiums, cooperatives, multi-unit properties, and planned unit developments are also excluded.<br><br>&#160;</li><li> <strong><a name="quest3">How is the FHFA HPI computed?</a></strong><br><br>The FHFA HPI is a weighted, repeat-sales index, meaning that it 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. The FHFA HPI is updated as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac. The new mortgage acquisitions are used to identify repeat transactions for the most recent period and for each subsequent period&#160;since 1975.&#160; <br> <br>FHFA house price index reports are released on a monthly basis for the United States and regions and on a quarterly basis for a variety of other geographies.&#160; Most statistics in the reports reference price changes computed by FHFA's standard&#160;&quot;purchase-only&quot; HPI.&#160; In some cases, however, the reported statistics reference alternative price measures.&#160; FHFA publishes - and makes <a href="/hpi">available for download</a>&#160;- several additional house price indexes beyond the standard &quot;purchase-only&quot; series.&#160; Although they use the same general methodology, the three alternatives rely on slightly different datasets as follows&#58;&#160; &#160;&#160; &#160;<br>&#160; <ul style="list-style-type&#58;disc;"><li>&quot;All-Transactions&quot; house price index.&#160; Appraisal values from refinance mortgages are added to the purchase-only data sample.&#160;<br></li><li>&quot;Expanded-Data&quot; house price index.&#160; Sales price information sourced from county recorder offices and from FHA-backed mortgages are added to the purchase-only data sample.&#160; This index is used to annually adjust the maximum conforming loan limits, which dictate the dollar amount of loans that can be acquired by Fannie Mae and Freddie Mac.&#160;<br></li><li>&quot;Distress-Free&quot; house price index.&#160; Sales of bank-owned properties and short sales are removed from the purchase-only dataset prior to estimation of the index.&#160;<br></li></ul> <br>Data constraints preclude the production of all types of indexes for every geographic area, but multiple index types are generally available.&#160; For individual states, for instance three types of indexes are available. The various indexes tend to correlate closely over the long-term, but short-term differences can be significant.&#160;&#160;&#160;<br><br><br></li><li> <strong><a name="quest4">How often is the FHFA HPI published?</a></strong><br><br>A comprehensive report is published every three months, approximately two months after the end of the previous quarter. Beginning in March 2008, OFHEO (one of FHFA's predecessor agencies) began publishing monthly indexes for census divisions and the&#160;U.S. FHFA continues publishing and updating these indexes each month.<br><br>&#160;</li><li> <strong><a name="quest5">How is the FHFA HPI updated?</a></strong><br><br>Each month, Fannie Mae and Freddie Mac provide FHFA with information on their most recent mortgage transactions. These data are combined with the data from previous periods to establish price differentials on properties where more than one mortgage transaction has occurred. The data are merged, creating an updated historical database that is then used to estimate the FHFA HPI.<br><br>&#160;</li><li> <strong><a name="quest6">How do I interpret &quot;four-quarter,&quot; &quot;one-year,&quot; &quot;annual,&quot; and &quot;one-quarter&quot; price changes?</a></strong><br><br>The &quot;four-quarter&quot; percentage change in home values is simply the price change relative to the same quarter one year earlier. For example, if the FHFA HPI release is for the second quarter, then the &quot;four-quarter&quot; price change reports the percentage change in values relative to the second quarter of the prior year. It reflects the best estimate for how much the value of a typical property increased over the four-quarter period (FAQ #2 reports the types of properties included in this estimate). &quot;One-year&quot; and &quot;annual&quot; appreciation are used synonymously with &quot;four-quarter&quot; appreciation in the full quarterly FHFA HPI releases.<br><br>Similar to the &quot;four-quarter&quot; price changes, the &quot;one-quarter&quot; percentage change estimates the percentage change in home values relative to the prior quarter. Please note that, in estimating the quarterly price index, all observations within a given quarter are pooled together; no distinction is made between transactions occurring in different months. As such, the &quot;four-quarter&quot; and &quot;one-quarter&quot; changes compare typical values throughout a quarter against valuations during a prior quarter. The appreciation rates do not compare values at the end of a quarter against values at the end of a prior quarter.<br><br>&#160;</li><li> <strong><a name="quest7">How are Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions defined and what criteria are used to determine whether an MSA index is published?</a></strong><br><br> MSAs are defined by the Office of Management and Budget (OMB). If specified criteria are met and an MSA contains a single core population greater than 2.5 million, the MSA is divided into Metropolitan Divisions. The following MSAs have been divided into Metropolitan Divisions&#58; Boston-Cambridge-Newton, MA-NH; Chicago-Naperville-Elgin, IL-IN-WI; Dallas-Fort Worth-Arlington, TX; Detroit-Warren-Dearborn, MI; Los Angeles-Long Beach-Anaheim, CA; Miami-Fort Lauderdale-Pompano Beach, FL; New York-Newark-Jersey City, NY-NJ-PA; Philadelphia-Camden-Wilmington, PA-NJ-DE-MD; San Francisco-Oakland-Berkeley, CA; Seattle-Tacoma-Bellevue, WA; Washington-Arlington-Alexandria, DC-VA-MD-WV. For these MSAs, FHFA reports data for each Division, rather than the MSA as a whole.&#160;<br><br>FHFA requires that an MSA (or Metropolitan Division) must have at least 1,000 total transactions before it may be published. Additionally, an MSA or Division must have had at least 10 transactions in any given quarter for that quarterly value to be published. Blanks are displayed where this criterion is not met. <br>&#160; </li><li> <strong><a name="quest8">Does FHFA use the September 2018 revised Metropolitan Statistical Areas (MSAs) and Divisions?</a></strong><br><br>Yes, FHFA uses the revised Metropolitan Statistical Areas (MSAs) and Divisions as defined by the Office of Management and Budget (OMB) in September 2018. The delineations became effective with the 2018Q4 FHFA HPI release in February 2019. These MSAs and Divisions are based on Census data. According to OMB, an MSA comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting. For information about the current MSAs, please visit&#58;<br><br><a href="https&#58;//www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf">https&#58;//www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf</a><br><br>Previously, FHFA produced metropolitan area indexes based on the February 2013 delineations (and as revised in July 2015, August 2017, and April 2018) and, before that release, the December 2009 delineations provided by the OMB.<br><br>The 2018Q4 FHFA HPI report has a Technical Note which explains the transition to the newest definitions. The accompanying tables are posted on the FHFA HPI Downloadable Data page under the “Additional Data” section then the “Utility Files and Background Information for Index Construction” subsection. Information for the prior delineations are also posted on that page.​ <br> <br></li><li> <strong><a name="quest9">What geographic areas are covered by the FHFA HPI?</a></strong><br><br> The FHFA HPI includes indexes for all nine census divisions, the 50 states and the District of Columbia, and every Metropolitan Statistical Area (MSA) in the U.S., excluding Puerto Rico. OMB recognizes 384 MSAs, 11 of which are subdivided into a total of 31 Metropolitan Divisions.&#160; As noted earlier, FHFA produces indexes for the divisions where they are available, in lieu of producing a single index for the MSA. In total, 404 indexes are released&#58; 373 for the MSAs that do not have Metropolitan Divisions and 31 Division indexes. The starting dates for indexes differ and are determined by a minimum transaction threshold; index values are not provided for periods before at least 1,000 transactions have been accumulated.<br><br>In each release, FHFA publishes rankings and quarterly, annual, and five-year rates of changes for the MSAs and Metropolitan Divisions that have at least 15,000 transactions over the prior 10 years. In this release, 23​1 MSAs and Metropolitan Divisions satisfy this criterion. For the remaining areas, MSAs and Divisions, one-year and five-year rates of change are provided. <br>&#160; </li><li> <strong><a name="quest10">What is the methodology used in computing the FHFA HPI?</a></strong><br><br>The methodology is a modified version of the Case-Shiller® geometric weighted repeat- sales procedure. A detailed description of the FHFA HPI methodology is available upon request at (202) 649-3195 or online at&#58; <a href="http&#58;//go.usa.gov/8BBT"> http&#58;//go.usa.gov/8BBT</a>.<br><br>&#160;</li><li> <strong><a name="quest11">How does the FHFA HPI differ from the Case-Shiller®&#160;Index?</a></strong><br><br>Although both indexes employ the same fundamental repeat-valuations approach, there are a number of data and methodology differences. Among the dissimilarities&#58;</li><ol><li>The Case-Shiller Indexes® only use purchase prices in index calibration, while the all-transactions FHFA HPI also includes refinance appraisals. FHFA's purchase-only series is restricted to purchase prices.</li><li>FHFA's valuation data are derived from conforming mortgages provided by Fannie Mae and Freddie Mac. The Case-Shiller Indexes use information obtained from county assessor and recorder offices.</li><li>The Case-Shiller Indexes are value-weighted, meaning that price trends for more expensive homes have greater influence on estimated price changes than other homes. FHFA's index weights price trends equally for all properties.</li><li>The geographic coverage of the indexes differs. The Case-Shiller National Home Price Index, for example, does not have valuation data from 13 states. FHFA's U.S. index is calculated using data from all states.<br><br>For details on these and other differences, consult the FHFA HPI Technical Description (see <a href="http&#58;//go.usa.gov/8BBT"> http&#58;//go.usa.gov/8BBT</a>) and the Case-Shiller methodology materials (see <a href="http&#58;//us.spindices.com/index-family/real-estate/sp-corelogic-case-shiller"> https&#58;//us.spindices.com/index-family/real-estate/sp-corelogic-case-shiller</a>).<br><br>A paper that analyzes in detail the methodological and data differences between the two price metrics can be accessed at <a href="http&#58;//go.usa.gov/8BBJ"> http&#58;//go.usa.gov/8BBJ</a>.<br><br>&#160;</li></ol><li> <strong><a name="quest12">How does the FHFA HPI differ from the Census Bureau's Constant Quality House Price Index (CQHPI)?</a></strong><br><br>The FHFA HPI covers far more transactions than the Commerce Department survey. The CQHPI covers sales of new homes and homes for sale, based on a sample of about 14,000 transactions annually, gathered through monthly surveys.&#160;The quarterly purchase-only FHFA HPI is based on more than&#160;nine&#160;million repeat transaction pairs over 44&#160;years. This gives a more accurate reflection of current property values than the Commerce Department index. The FHFA HPI also can be updated efficiently using data collected by Fannie Mae and Freddie Mac in the normal course of their business activity.<br><br>&#160;</li><li> <strong><a name="quest13">Where can I access MSA index numbers and standard errors for each year and quarter?</a></strong><br><br>In addition to the information displayed in the MSA tables, FHFA makes available MSA indexes and standard errors. The data are available in ASCII format and may be accessed at <a href="http&#58;//go.usa.gov/8kXz"> http&#58;//go.usa.gov/8kXz</a>.<br><br>&#160;</li><li> <strong><a name="quest14">What role do Fannie Mae and Freddie Mac play in the FHFA HPI?</a></strong><br><br>FHFA uses data supplied by Fannie Mae and Freddie Mac in compiling the FHFA HPI. Each of the Enterprises had previously created a weighted repeat-transactions index based on property matches within its own database. In the first quarter of 1994, Freddie Mac began publishing the Conventional Mortgage Home Price Index (CMHPI). The CMHPI was jointly developed by Fannie Mae and Freddie Mac. The CMHPI series covers the period 1970 to the present.<br><br>&#160;</li><li> <strong><a name="quest15">Why is the FHFA HPI based on Fannie Mae or Freddie Mac mortgages?</a></strong><br><br>FHFA has access to this information by virtue of its role as the federal regulator responsible for these government-sponsored enterprises. Chartered by Congress for the purpose of creating a reliable supply of mortgage funds for homebuyers, Fannie Mae and Freddie Mac are the largest mortgage finance institutions in the U.S. representing a significant share of total outstanding mortgages.<br><br>&#160;</li><li> <strong><a name="quest16">When are the indexes normalized in the downloadable ASCII data?</a></strong><br><br>The ASCII data for metropolitan areas are normalized to the first quarter of 1995. That is, the FHFA HPI equals 100 for all MSAs in the first quarter of 1995. States and divisions are normalized to 100 in the first quarter of 1980. The purchase-only indexes are normalized to 100 in the first quarter of 1991. Note that normalization dates do not affect measured appreciation rates.<br><br>&#160;</li><li> <strong><a name="quest17">Is the FHFA HPI adjusted for inflation?</a></strong><br><br>No, the FHFA HPI is not adjusted for inflation. For inflation adjustments, one can use the Consumer Price Index &quot;All Items Less Shelter&quot; series. The Bureau of Labor Statistics' price index series ID# CUUR0000SA0L2, for example, has tracked non-shelter consumer prices since the 1930s. That series and others can be downloaded at&#58; <a href="http&#58;//data.bls.gov/cgi-bin/srgate"> http&#58;//data.bls.gov/cgi-bin/srgate</a>.<br><br>&#160;</li><li> <strong><a name="quest18">How do I use the manipulatable data (in TXT files) on the website to calculate appreciation rates?</a></strong><br><br>The index numbers alone (for census divisions and U.S., individual states, and MSAs) do not have significance. They have meaning in relation to previous or future index numbers, because you can use them to calculate appreciation rates using the formula below.<br><br>To calculate appreciation between any 2 quarters, use the formula&#58;<br><br>(QUARTER 2 INDEX NUMBER - QUARTER 1 INDEX NUMBER) / QUARTER 1 INDEX NUMBER<br><br>You can generate annual numbers by taking the four quarter average for each year or monthly numbers by finding the difference between two months.<br><br>&#160;</li><li> <strong><a name="quest19">How is the FHFA HPI constructed for MSAs? The website says that FHFA uses the 2018 definitions based on the American Community Survey and Census Bureau population estimates for 2015 to define each MSA. Is this true for all time periods covered by each index? Or do the definitions change over time as the Census expanded its MSA definitions? For example, if the definition of an MSA added three counties between 1980 and 2000, would the value of the index in 1980 cover the three counties that were not included in the 1980 SMSA definition?</a></strong><br><br>The FHFA HPI is recomputed historically each quarter. The MSA definition used to compute the 1982 (for example) index value in Anchorage, AK would be the most recent definition. The series is comparable backwards.<br><br>&#160;</li><li> <strong><a name="quest20">How can the FHFA House Price Index for an MSA be linked to ZIP codes within that MSA?</a></strong><br><br>Although&#160;FHFA has&#160;published experimental house price indexes for some&#160;ZIP codes, those indexes are annual (i.e. quarterly index values are not provided). Researchers needing quarterly values for ZIP codes may be interested in using index values for the applicable metropolitan&#160;area.<br>&#160;<br>Because ZIP codes sometimes overlap county boundaries, a single ZIP code can be located partially inside and outside of a Metropolitan Area. Thus, the development of a crosswalk between ZIP codes and Metropolitan Areas is not a straightforward exercise. The Department of Housing and Urban Development has released a lookup table that maps ZIP codes to the Metropolitan Area(s) that they fall within. That lookup file, as well as a discussion of the underlying technical issues, can be found here&#58; <a href="http&#58;//www.huduser.org/portal/datasets/usps_crosswalk.html">http&#58;//www.huduser.org/portal/datasets/usps_crosswalk.html</a>.<br><br>&#160;</li><li> <strong><a name="quest21">How and why is the FHFA HPI revised each quarter?</a></strong><br><br>Historical estimates of the FHFA HPI revise for three primary reasons&#58;</li><ol><li>The FHFA HPI is based on repeat transactions. That is, the estimates of appreciation are based on repeated valuations of the same property over time. Therefore, each time a property &quot;repeats&quot; in the form of a sale or refinance, average appreciation since the prior sale/refinance period is influenced.<br><br></li><li>Fannie Mae and Freddie Mac (the Enterprises) purchase seasoned loans, providing new information about prior quarters.<br><br></li><li>Due to a 30- to 45-day lag time from loan origination to Enterprise funding, FHFA receives data on new fundings for one additional month following the last month of the quarter. These fundings contain many loans originating in that most recent quarter, and especially the last month of the quarter. This will reduce with subsequent revisions, however data on loans purchased with a longer lag, including seasoned loans, will continue to generate revisions, especially for the most recent quarters.<br><br>In connection with the release of the 2012Q2 FHFA HPI results, a special revision was made to two historical FHFA HPI values. In prior releases, the all-transactions index values for Vermont-1976Q1 and West Virginia-1982Q1 were both reported to be 100.01.&#160;Those values were not correct; index values for those respective periods should have been set to missing because no modeling data were available in the underlying sample. The FHFA HPI releases for 2012Q2 and later periods reflect the change. With the release of the 2019Q1 FHFA HPI results, modeling data became available for Vermont-1976Q1.&#160;The FHFA HPI releases for 2019Q1 and later periods reflect the change.<br><br>&#160;</li></ol><li> <strong><a name="quest22">What transaction dates are used in estimating the index?</a></strong><br><br>For model estimation, the loan origination date is used as the relevant transaction date.<br><br>&#160;</li><li> <strong><a name="quest23">Are foreclosure sales included in the FHFA HPI?</a></strong><br><br>Transactions that merely represent title transfers to lenders will not appear in the data. Once lenders take possession of foreclosed properties, however, the subsequent sale to the public can appear in the data. As with any other property sale, the sales information will be in FHFA's data if the buyer purchases the property with a loan that is bought or guaranteed by Fannie Mae or Freddie Mac.<br><br>&#160;</li><li> <strong><a name="quest24">How are the monthly FHFA HPIs calculated?</a></strong><br><br>The monthly indexes are calculated in the same way the quarterly indexes are constructed, except transactions from the same quarter are no longer aggregated. To construct the quarterly index, all transactions from the same quarter are aggregated and index values are estimated using the assigned quarters. In the monthly indexing model, all transactions for the same month are aggregated and separate index values are estimated for each month.<br><br>&#160;</li><li> <strong><a name="quest25">How are the Census Division and U.S.&#160;FHFA HPIs&#160;formed?</a></strong><br><br>As discussed in the Highlights article accompanying the 2011Q1 FHFA HPI Release (available for download at <a href="http&#58;//go.usa.gov/8k5d">http&#58;//go.usa.gov/8k5d</a>), the census division indexes are constructed from statistics for the component states. For the quarterly all-transactions and purchase-only indexes, the census division indexes are constructed from quarterly growth rate estimates for the underlying state indexes. Census division index estimates are &quot;built-up&quot; from quarterly growth rate estimates (monthly growth rates for the monthly index) for the component states.<br><br>The census division indexes are set equal to 100 in the relevant base periods. Then, the index values for subsequent periods are increased (or decreased) by the weighted average quarterly (or monthly) price change for the underlying states. Index values for periods before the base period are calculated in a similar fashion; beginning with the base period value, the preceding index values are sequentially determined so that the growth rate in each period always reflects the weighted average growth rate for the component states.<br><br>The national FHFA HPI is constructed in an analogous fashion, except that the weighted components are census divisions. Because the census divisions measures are themselves weighted averages of state metrics, the U.S. index is equivalent to a state-weighted metric.<br><br>&#160;</li><li> <strong><a name="quest26">What weights are used in forming the Census Division and U.S. FHFA HPIs?</a></strong><br><br>The weights used in constructing the indexes are estimates for the shares of one-unit detached properties in each state.&#160; For years in which decennial census data are available, the share from the relevant census is used. For intervening years, a state’s share is the weighted average of the relevant shares in the prior and subsequent censuses, where the weights are changed by ten percentage points each year.&#160;For example, California’s share of the housing stock for 1982 is calculated as 0.8 times its share in the 1980 census plus 0.2 times its share in the 1990 census. For 1983, the Pacific Division’s share is 0.7 times its 1980 share plus 0.3 times its 1990 share.&#160;<br><br>For years since 2000, state shares are calculated as follows&#58;<br><br> <ul><li>For the 2001-2005 interval, shares are straight-line interpolated based on the state shares in the 2000 decennial Census and the 2005 values from the American Community Survey (ACS).</li><li>For 2006-2017, the estimates are from the annual ACS.</li><li>Until 2018 ACS estimates become available, shares from the 2017 ACS are used for subsequent periods.<br></li></ul> <br> </li><li> <strong><a name="quest27">For those HPIs that are seasonally adjusted, what approach is used in performing the seasonal adjustment?</a></strong><br><br>The Census Bureau's X-12 ARIMA procedure is used, as implemented in the SAS software package. The automated ARIMA model-selection algorithm in X-12 is employed, which searches through a series of seasonality structures and selects the first that satisfies the Ljung-Box test for serial correlation.<br>&#160;<br>To obtain more information on the FHFA HPI contact us via the Data and Research Contact page at <a href="http&#58;//go.usa.gov/8kN3">http&#58;//go.usa.gov/8kN3</a>.<br><br>&#160;</li><li> <strong> <a name="quest28">Do you have an FHFA HPI that includes loans which are not purchased or securitized&#160;by Fannie Mae or Freddie Mac?</a></strong><br><br>Yes, the expanded-data index includes purchase-money mortgages from other sources.&#160;The approach to estimating the expanded-data HPI is detailed in the Highlights article published with the 2011Q2 FHFA HPI at <a href="http&#58;//go.usa.gov/8kNm"> http&#58;//go.usa.gov/8kNm</a>. In general, the methodology is the same as is used in the construction of the standard purchase-only FHFA HPI, except a supplemented dataset is used for estimation. The augmented data include sales price information from Fannie Mae and Freddie Mac mortgages as well as two new information sources&#58; (1) transactions records for houses with mortgages endorsed by FHA and (2) county recorder data licensed from CoreLogic. The licensed county recorder data do not include records in many U.S. counties—particularly rural ones. To ensure that the addition of the CoreLogic data to the estimation sample does not unduly bias index estimates toward price trends in urban areas, the expanded-data index for certain states is estimated by weighting price trends in areas with CoreLogic coverage and other areas. Details on this sub-area weighting can be found in the text of the Highlights piece referenced above.<br><br>&#160;</li><li> <strong><a name="quest29">Is there an FHFA HPI that corrects for distressed sales?</a></strong><br><br>FHFA released a &quot;distress-free&quot; HPI in 2012Q2 along with the Highlights article at <a href="http&#58;//go.usa.gov/8kNJ"> http&#58;//go.usa.gov/8kNJ</a>. The index is a version of the purchase-only index that removes short sales and sales of bank-owned properties from the transactions data used to compute that traditional index. The index is still in a developmental stage. An analysis of how distressed sales affect the FHFA HPI is provided in an FHFA Working Paper released August 2013 at <a href="http&#58;//go.usa.gov/8kRB"> http&#58;//go.usa.gov/8kRB</a>.&#160;<br><br><br></li><li> <strong><a name="quest30">Can I use the data in the FHFA&#160;HPI and, if so, how should the index be cited?</a></strong>&#160;<br><br>Yes. The FHFA HPI data are freely available for download at <a href="/hpi">https&#58;//www.fhfa.gov/hpi</a>. To cite the index in an article or story, we suggest at least an attribution like &quot;Source&#58; FHFA HPI&quot; or &quot;Source&#58; Federal Housing Finance Agency House Price Index (HPI)&quot;. Additional clarifications could be helpful to denote the type of index (purchase-only, all-transactions, expanded-data) and whether the data are adjusted for seasonality or inflation. A more&#160;detailed citation might be &quot;Source&#58; FHFA HPI (purchase-only, seasonally-adjusted, nominal)&quot;.<br><br> <a href="/Media/PublicAffairs/PublicAffairsDocuments/FHFA-HPI-FAQs_11262019.pdf"> <strong>FHFA HPI FAQs (PDF) as of 11/26/2019</strong></a><br></li></ol>11/26/2019 2:00:57 PMHome / Media / FHFA House Price Index Frequently Asked Questions FAQs What is the methodology used in 16729https://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
U.S. House Price Index - 3Q 201930000<p>U.S. house prices rose in the third quarter of 2019, up <strong>1.1 percent</strong> according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).&#160; House prices rose <strong>4.9 percent </strong>from the third quarter of 2018 to the third quarter of 2019.&#160; FHFA's seasonally adjusted monthly index for September was up <strong>0.6 percent</strong> from August.</p><p> <strong>Significant Findings​</strong></p><ul><li><p>House prices have risen for 33 consecutive quarters across the United States.</p></li><li><p>House prices rose in all 50 states and the District of Columbia between the third quarters of 2018 and 2019.&#160; The top five states in annual appreciation were&#58; 1) <strong>Idaho </strong>11.6 percent; 2) <strong>Maine </strong>7.9 percent; 3) <strong>Arizona </strong>7.9 percent; 4) <strong>Utah </strong>7.8 percent; and 5) <strong>Indiana </strong>7.4 percent. &#160;The states showing the smallest annual appreciation were&#58; &#160;1) <strong>Illinois </strong>1.9 percent; 2) <strong>Connecticut </strong>2.2 percent; 3) <strong>Maryland </strong>2.4 percent; 4)<strong> South Dakota</strong> 2.7 percent; and 5) <strong>Iowa </strong>3.2 percent.</p></li><li><p>House prices rose in all 100 of the largest metropolitan areas in the U.S. over the last four quarters. &#160;Annual price increases were greatest in <strong>Boise City, ID,</strong> where prices increased by 11.1 percent.&#160; Prices were weakest in <strong>Camden, NJ (MSAD),</strong> where they increased 0.7 percent.</p></li><li><p>Of the nine census divisions, the <strong>Mountain </strong>division experienced the strongest four-quarter appreciation, posting a 6.9 percent gain between the third quarters of 2018 and 2019 and a 1.8 percent increase in the third quarter of 2019. &#160;Annual house price appreciation was weakest in the <strong>Middle Atlantic</strong> division, where prices rose by 4.0 percent between the third quarters of 2018 and 2019.</p></li><li><p>FHFA produced Fact Sheets that include graphics on the Top 20 and Bottom 20 ranked Metropolitan Statistical Areas in the U.S. here&#58; <a href="/HPI-Fact-Sheets">https&#58;//www.fhfa.gov/HPI-Fact-Sheets</a>.</p></li></ul><p> <a href="/Media/PublicAffairs/Pages/US-House-Prices-Rise-1pt1-Percent-in-Third-Quarter-Up-4pt9-Percent-from-Last-Year.aspx">Related News Release</a></p><p> <a href="/DataTools/Tools/Pages/Four-Quarter-Heat-Map.aspx">Link to interactive map</a></p><p> <a href="/DataTools/Downloads/Pages/House-Price-Index.aspx">More information about FHFA HPI<br> </a></p>11/26/2019 2:00:59 PMHome / About FHFA / Reports / U.S. House Price Index - 3Q 2019 House Price Index 2822https://www.fhfa.gov/AboutUs/Reports/Pages/Forms/AllItems.aspxhtmlFalseaspx

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