Burlington-South Burlington, VT Federal Housing Finance Agency Home Price Index (FHFA HPI)

In the Burlington-South Burlington, VT, Federal Housing Finance Agency (FHFA) house price index (HPI), home equity and home prices are both represented. Home equity is the portion of a property's value that is owned by the homeowner, while home prices represent the total value of a property.

The HPI is based on data from Fannie Mae and Freddie Mac, which purchase mortgages from lenders and securitize them into mortgage-backed securities. The HPI includes all single-family properties with a mortgage that were purchased, refinanced, or securitized by Fannie Mae or Freddie Mac between January 1, 2000 and December 31, 2016.

Between 2000 and 2016, home prices in the Burlington-South Burlington metro area increased by an average of 4.4% per year. In contrast, during the same time period, the national average annual rate of home price growth was 3.1%. As of December 2016, the median home price in the metro area was $247,000; this is higher than both the Vermont state median home price ($238,000) and the national median home price ($205,000).

Home equity in Burlington-South Burlington has also increased over time. The average homeowner in the metro area had $145,000 in equity as of December 2016; this is up from $116,000 in 2000. The increase in home equity can be attributed to both appreciation in property values and principal payments made on mortgages.

The appreciation of home values has been especially beneficial for those who own their homes outright or have very small mortgage balances relative to their property's value. For example, a homeowner who purchased a $200,000 house in 2000 with a 20% down payment would have had an initial investment (down payment plus closing costs) of $40,000. As of December 2016 – after 16 years of appreciation at 4.4% per year – that same house would be worth $247,000; this represents an increase in value of over $100 thousand dollars since purchase! And because this owner has likely made some principal payments on their mortgage over time as well (reducing their loan balance), they would likely have even more equity than just 16 years ago."