Lafayette-West Lafayette, IN Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Lafayette-West Lafayette, IN, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index measuring average price changes in single-family houses in the Lafayette metropolitan area. The HPI is based on sales price information from Fannie Mae and Freddie Mac - two government-sponsored enterprises that purchase mortgages from lenders.

Between 2000 and 2006, the HPI for the Lafayette metro area increased by nearly 60%. This was well above the national average of 45%. However, since 2006 the HPI has fallen by about 15%. This is still better than the national average decline of 30%.

The fall in HPI has been driven by a number of factors. Firstly, there has been a decrease in demand for housing in the area. This is due to job losses in the manufacturing sector, which has been hit hard by globalization and automation. Secondly, there has been an increase in foreclosures and short sales. This has put downward pressure on prices as banks are often willing to accept less than what is owed on a property. Finally, credit conditions have tightened, making it more difficult for potential buyers to obtain financing.

Despite the recent decline in prices, home equity levels remain high in the Lafayette metro area. According to CoreLogic, a data provider, the average homeowner had equity of nearly 50% as of Q3 2016. This is well above the national average of 30%. The high level of equity is due to both strong price appreciation over the past few years as well as low mortgage rates.