Birmingham-Hoover, AL Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Birmingham-Hoover, AL, 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 index covers single-family homes in the Birmingham-Hoover metropolitan statistical area.

As of December 2020, the Birmingham-Hoover HPI was at 184.3, up from its all-time low of 168.8 in December 2011. Home prices in the area have been on the rise since then, but at a slower pace than most other parts of the country. The HPI for Alabama as a whole was at 190.7 in December 2020, while the national HPI was at 251.3.

The reason for the slower pace of growth in home prices in Birmingham-Hoover is likely due to a combination of factors. First, the area was hit hard by the Great Recession and has not yet fully recovered. The unemployment rate in Birmingham-Hoover was 5% as of December 2020, which is higher than both the state and national averages (4% and 3%, respectively). Second, while home prices have been rising across the country since 2012, they have not risen as much in Alabama as they have elsewhere. This is likely due to a combination of factors including lower incomes and a smaller population growth rate compared to other states.

Despite these challenges, there are some positive trends happening in Birmingham-Hoover that suggest that home prices could start to rise more quickly in the future. First, job growth has been strong over the past year or so and is expected to continue into 2021. This should help boost incomes and increase demand for housing. Second, population growth has picked up recently due to an influx of people moving from other parts of Alabama and neighboring states such as Mississippi and Tennessee (Birmingham Business Journal). This increased demand for housing should help drive up prices even further over time