Durham-Chapel Hill, NC Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Durham-Chapel Hill, NC, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index measuring average price changes in single-family houses with mortgages backed by Fannie Mae or Freddie Mac. The HPI covers the nine-county Durham-Chapel Hill, NC metropolitan statistical area (MSA), which includes the following counties: Chatham, Durham, Franklin, Granville, Hoke, Lee, Montgomery, Moore and Orange.

As of the fourth quarter of 2019, the HPI for the Durham-Chapel Hill MSA was 275.2 (meaning that a home valued at $100 in the base period of January 2000 would be worth $275.20 in December 2019). This was an increase of 6.3 percent from the fourth quarter of 2018 when the HPI was 258.7. The house price appreciation in the Durham-Chapel Hill MSA has outpaced both national and state averages over the past year as well as over the past five years. As of December 2019, prices were up 55.4 percent from their January 2000 levels while nationally prices were up 46.9 percent and statewide prices were up 53.8 percent over that same time period.

Over the past five years (2014 to 2019), prices in the Durham-Chapel Hill MSA have appreciated at an annualized rate of 7.6 percent compared to 5.5 percent for North Carolina and 5.1 percent for the nation as a whole during that same time frame1 . This recent strong performance is attributable to a number of factors including population growth due to net migration as well as job growth in key industries such as education and health services, professional and business services, and leisure and hospitality2 . Additionally low mortgage rates have helped to support housing demand while limited supply has put upward pressure on prices3 .

Looking forward it is unclear how long these trends will continue given current economic conditions including rising unemployment due to COVID-19 pandemic related layoffs as well as potential interest rate increases if inflationary pressures begin to build4 . However given that many people are now working remotely which could lead to more flexibility in where they choose to live it is possible that demand for housing in desirable areas like Chapel Hill could remain strong even if there is some slowdown in overall economic activity5 .