McAllen-Edinburg-Mission, TX Federal Housing Finance Agency Home Price Index (FHFA HPI)

The McAllen-Edinburg-Mission, 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 covers single-family homes and condominiums.

The HPI value for McAllen-Edinburg-Mission was 176.9 in the first quarter of 2020, down 0.4% from the fourth quarter of 2019 but up 2.8% from a year earlier. Home prices in the McAllen area have been rising steadily since bottoming out in early 2011 and are now nearly back to their pre-recession peak levels.

Despite the recent slowdown in home price growth, McAllen remains one of the hottest housing markets in the country thanks to strong job and population growth. The unemployment rate in the McAllen metro area was just 3.7% in March 2020, well below the national average of 4.4%. And, thanks to its proximity to Mexico, McAllen is one of the fastest-growing cities in Texas with a population that has increased by nearly 8% since 2010.

With strong job and population growth continuing to drive demand for housing, it's likely that home prices will continue to rise in McAllen over the coming months and years. However, given that prices are already quite high relative to both historical norms and incomes in the area, there is also a risk that affordability constraints could start to weigh on market conditions at some point down the road.