Bangor, ME Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Bangor, ME, Federal Housing Finance Agency (FHFA) House Price Index (HPI) is a weighted, repeat-sales index that measures average price changes in repeat sales or refinancings on the same properties. The HPI covers single-family properties that have been sold at least twice since January 1975.

In the fourth quarter of 2019, the FHFA House Price Index for Bangor was 176.1, up 1.4 percent from the previous quarter and up 4.7 percent from a year earlier. This is the highest HPI on record for Bangor, surpassing the previous peak of 173.6 set in the second quarter of 2018. Home prices in Bangor have been rising steadily since bottoming out in early 2011 and are now nearly 50 percent above their pre-recession peak set in early 2007.

The strong housing market in Bangor has been driven by a number of factors, including low mortgage rates, population growth, and limited supply of available homes for sale. The median sales price of existing homes in Bangor was $219,900 in 2019, up 5 percent from 2018 and nearly 20 percent higher than the pre-recession peak set in 2007 ($184,900). The tight housing market has also led to increased rental demand and higher rents; the median rent for a two-bedroom apartment in Bangor was $1,200 per month in 2019, up 3 percent from 2018 and 14 percent higher than the pre-recession peak set in 2008 ($1,050).

The combination of strong housing demand and limited supply has put upward pressure on home prices across Maine. In 2019, Maine had the fifth highest rate of home price growth among all states (5.3%), behind only Nevada (8%), Idaho (7%), Utah (6%), and Colorado (5%). While home prices are rising rapidly across much of Maine, they remain relatively affordable compared to other parts of New England and other coastal markets nationwide; the median home price in Portland was $360,000 in 2019 while Boston's median home price was nearly double that at $700,000.

Despite strong recent growth ,home prices remain below their long-term trend line In order to return to its long term trend line ,the FHFA house price index for Bangor would need to reach 213 .This would require an additional 21% increase from its current level .With mortgage rates remaining low and population growth expected to continue ,it is possible that home prices could reach this level within the next few years .