Daphne-Fairhope-Foley, AL Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Daphne-Fairhope-Foley, 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 and condominiums. The Daphne-Fairhope-Foley HPI includes data from Baldwin County and is one of nine HPIs covering major metropolitan areas in Alabama.

Between 2000 and 2006, the Daphne-Fairhope-Foley HPI rose steadily, reaching a peak of 168.6 in the second quarter of 2006. This represented an increase of 68.6% from the 2000 level of 99.9. After peaking in 2006, the index began to decline, reaching a trough of 134.8 in the first quarter of 2011. From its peak to its trough, the Daphne-Fairhope-Foley HPI declined by 20%.

Since bottoming out in 2011, the Daphne-Fairhope-Foley HPI has been on an upward trend, reaching 150.1 in the fourth quarter of 2017 – an increase of 11% from its trough level six years earlier. As of 2017:Q4, the index remained 12% below its prerecession peak level reached in 2006:Q2 but had regained more than half of its value lost during the downturn.

The rebound in home prices across much of Alabama since 2011 has been driven by several factors:

* Low mortgage rates – Mortgage rates fell to historic lows following the Great Recession and have remained low by historical standards even as they have risen modestly since 2013;

* Improving economic conditions – Employment growth across Alabama has picked up since 2010 and incomes have grown as well;

* Limited supply – The number of homes for sale relative to population growth and household formation trends remains tight relative to historical norms;

* Investor demand – Investors have played a role in supporting housing market activity and price gains since 2012 as they seek higher returns than are available from other asset classes such as bonds and stocks;

* Favorable demographics – Population growth trends among young adults (ages 25–34), who are typically prime first-time homebuyers ,have been positive for much of Alabama over recent years .