Ocean City, NJ Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Ocean City, NJ, 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 any given month is equal to 100 if the average home price during that period was exactly the same as the base period. A value of 120 means prices have increased 20 percent since the base period; conversely, a value of 80 means prices have declined 20 percent since the base period.

In order to be included in the HPI, a property must have at least two sales or refinancings in each year from 1975 through 2017. If there are not enough transactions in a particular year to produce reliable estimates for that year, then that year is excluded from the analysis. For this reason, some years are missing from our data set. In addition, we exclude any transaction where either the buyer or seller is an institutional investor, as these types of transactions are not considered typical market activity and can distort HPI values.

The FHFA HPI uses data from Freddie Mac's Primary Mortgage Market Survey® (PMMS®), which surveys lenders each week on their mortgage rates and loan terms and collects information on originations of conventional mortgages used to purchase homes or refinance existing mortgages. We use only those transactions where borrowers obtained fixed-rate mortgages with terms of 30 years or less and amortize over 360 months; we exclude adjustable-rate mortgages and loans with terms greater than 30 years because they do not fit our definition of a "typical" home purchase loan used by most homebuyers in Ocean City, NJ. In addition, we adjust for differences in local market conditions by including variables such as median family income and population density in our model; this ensures that our results are not biased by regional factors unrelated to housing markets themselves.

As of December 2017, the FHFA HPI for Ocean City was 241.7, meaning prices had increased 141.7% since January 1975 (the start date of our data set). This was slightly higher than the national average HPI of 235.3 for December 2017 but lower than other Northeast coastal cities like New York (256.4), Boston (253.8), and Philadelphia (247.6). However, it should be noted that while Ocean City's overall HPI has been increasing steadily since 1975, there have been periods where prices decreased significantly on a yearly basis; for example, prices fell by 6% between 2007 and 2008 during the subprime mortgage crisis before beginning to rebound in 2009 .

Looking at more recent data , we see that between 2016 and 2017 , prices increased by 5%. This is inline with what we would expect given recent trends in both job growth and wages . In fact , according to Realtor .com , job growth in Ocean City was 3rd highest among all U . S . cities over this time period , while wages grew at twice the national rate . These strong economic fundamentals suggest that demand for housing will continue to be strong in Ocean City , which bodes well for future house price appreciation .