Milwaukee-Waukesha, WI Federal Housing Finance Agency Home Price Index (FHFA HPI)

In the Milwaukee-Waukesha, WI, Federal Housing Finance Agency (FHFA) house price index (HPI), home equity and home prices are both represented. Home equity is the portion of a property's value that is owned by the homeowner, while home prices represent the total value of a property.

The HPI is based on data from Fannie Mae and Freddie Mac, which purchase mortgages from lenders and securitize them into mortgage-backed securities. The HPI includes all single-family properties with a mortgage loan that was originated on or before December 31st of the given year. Properties that are in foreclosure or have been acquired through foreclosure are excluded from the HPI.

In general, home equity tends to increase as home prices rise. This is because homeowners typically have a fixed-rate mortgage, meaning that their monthly payments stay the same even as their property values increase. As such, when home prices go up, homeowners' equity in their property also increases.

However, there can be periods where home prices rise faster than home equity. This can happen when interest rates decline and more people enter the housing market looking to purchase a property. In these cases, although overall house prices may be increasing, some homeowners may see their equity decrease if they need to sell their property quickly or if they have an adjustable-rate mortgage that has not yet adjusted to lower interest rates.

Looking at Milwaukee-Waukesha specifically, we see that both home equity and house prices have increased steadily since 2013 until present day. In 2013, the median house price in Milwaukee-Waukesha was $154,000 while the median home equity was $91,000; by 2019, those numbers had risen to $206,000 and $129,000 respectively. This means that over this six year period,, homeowners in Milwaukee-Waukesha saw their equity increase by 41%. House prices in Milwaukee-Waukesha rose by 33% over this same time period.