El Paso, TX Federal Housing Finance Agency Home Price Index (FHFA HPI)

The El Paso, TX, 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 was created in order to be a more accurate measure of house price changes than other methods, such as the Case-Shiller Index.

As of December 2016, the El Paso HPI was at 159.4, up from 156.1 in November 2016 and up from 155.8 in December 2015. This means that home prices in El Paso have increased by 2.7% over the past year and are now at their highest level since the index began in January 1991.

There are several factors driving the increases in home prices in El Paso. The first is population growth. According to the U.S Census Bureau, El Paso's population has grown by 1% since 2010 and is now over 650,000 people. This population growth is being driven by both natural increase (more births than deaths) and net migration (more people moving into El Paso than moving out). The combination of these two factors is resulting in more demand for housing which is pushing prices up.

Another factor driving up home prices is low interest rates which make it cheaper to borrow money for a mortgage loan. According to Freddie Mac, the average 30-year fixed mortgage rate was 3.95% as of December 2016, down from 4.32% one year earlier and down from 5%, which was the average rate just prior to the housing market crash in 2008/2009.. Low interest rates make it easier for people to afford a mortgage loan and this increased demand is also pushing prices higher..

The final factor driving up prices is limited supply of homes for sale relative to demand from buyers.. According to Realtor .com , there were only 1,780 homes listed for sale in El Paso County as of December 2016.. This represents a 3 .9 months supply of homes based on current sales rates , meaning it would take just under four months to sell all available homes if no new listings were added.. This tight supply situation exists because many homeowners who could sell their homes are choosing not do so because they owe more on their mortgage loan than their home is currently worth .. This phenomenon , known as being "underwater" or "upside down" on your mortgage , occurred during the housing market crash when home values plummeted but has slowly been improving since then .. In El Paso County , 14 % of homeowners with a mortgage were still underwater as of September 2016 according to Zillow .. While this number has been declining steadily since its peak of nearly 50 % underwater back in 2011 , it still represents a significant number of potential sellers who are keeping their homes off the market .. As more homeowners regain equity in their homes we should see an increase in listings which will help alleviate some upward pressure on prices but until then we can expect continued strong price growth due largely to limited supply .