Palm Bay-Melbourne-Titusville, FL Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Palm Bay-Melbourne-Titusville, FL, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index that measures average home price changes in the area. The HPI is based on sales data from Fannie Mae and Freddie Mac single-family mortgages purchased by Ginnie Mae.

As of December 2020, the Palm Bay-Melbourne-Titusville HPI was 241.3, up 7.0% from December 2019. This increase marks the 28th consecutive month of year-over-year gains and the highest level since August 2007. Home prices in the Palm Bay metro have now recovered 61% of their peak-to-trough decline during the housing crisis.

The strong housing market in 2020 was driven by historically low mortgage rates, which spurred demand for both existing homes and new construction. The combination of tight supply and high demand led to bidding wars in many markets across the country, pushing prices upward.

In addition to low mortgage rates, another factor driving up home prices in the Palm Bay metro is an increase in second home buyers and investors looking to cash in on the hot market. These buyers are often willing to pay more than traditional owner occupants because they are not as concerned with things like school districts or commute times. This has put even more upward pressure on prices in already tight markets like Palm Bay.

Looking ahead to 2021, it is likely that home prices will continue to rise as long as mortgage rates remain low and demand remains high relative to supply. However, there is always the potential for a sharp correction if economic conditions deteriorate or if there is a sudden increase in interest rates.